FX.co ★ GBP/USD: plan for the European session on June 25. COT reports. The results of the Bank of England meeting hit the bulls' positions

To open long positions on GBP/USD, you need:

Yesterday everyone was waiting for the results of the Bank of England meeting, which did not coincide with the expectations of economists, which hit the pound's positions. Let's take a look at the 5 minute chart and talk about what happened. The Bank of England left its policy and forecasts completely unchanged, which led to a breakthrough of support at 1.3927. Its reverse test created an excellent signal to open short positions in continuation of the downward trend. But even if you did not have time to enter the first short positions from this level, it could always be done when the bulls failed to take control of 1.3927 in the second half of the day. Each time the pair fell by more than 40 points.

At the moment, the technical picture has changed and the bulls need to try to regain their position in the market. Retail sales in the UK, according to the Confederation of British Industry and the Bank of England's quarterly bulletin, may help the bulls regain the 1.3943 level, where moving averages are now running on the side of the bears. A breakthrough and consolidation above this level and its reverse test from top to bottom will generate a buy signal and open a direct road to the 1.3996 area, where I recommend taking profits. The next target will be the high of 1.4047, the test of which will completely cancel out the bear market. If the pressure on the pound persists in the first half of the day, and we see the pair falling to the 1.3891 area, then forming a false breakout at this level generates a signal to open long positions in continuation of the pound's growth. If the bulls are not active in the 1.3891 area and the pound falls further, it is best to postpone long positions until the 1.3833 low is renewed. It is also possible to buy the pound immediately upon a rebound from the level of 1.3774 with the aim of an upward correction of 25-30 points within the day.

To open short positions on GBP/USD, you need:

The bears' initial task is to protect the resistance at 1.3943, which was formed at the end of Thursday. Forming a false breakout there will be a signal to sell the pound, which will push the pair back to the support of 1.3891, which will have to be fought for very seriously. An equally important task for the bears is a breakthrough and a reverse test of this level from the bottom up, which will lead to forming another entry point into short positions and allow GBP/USD to reach lows like 1.3833 and 1.3774, where I recommend taking profits. Weak UK fundamentals could help with this scenario. Inf the bears are not active in the resistance area of 1.3943, I recommend postponing short positions until the test of this week's high at 1.3996, or even higher - to the level of 1.4047, where you can open short positions immediately on a rebound, counting on a downward correction of 20-25 points within the day.

The Commitment of Traders (COT) reports for June 15 showed that both long and short positions sharply decreased, however, this did not negatively affect the positive delta, but, on the contrary, even increased it due to a larger reduction in the bears' positions. The data was collected even before the Federal Reserve announced its decision on monetary policy, so I recommend not paying special attention to them, since at the moment the picture is already of a different nature. Good inflation in the UK will continue to create a certain pressure on the Bank of England, but so far there is no reason for panic, as is the case in the US, for the British central bank. This week, the central bank will hold a meeting, where most likely everything will remain unchanged, which may lead to continued pressure on the British pound and it may continue to fall against the US dollar in the short term. Similar statements from representatives of the Bank of England no longer work, so the market will only react to new guidelines for monetary policy, if any. Another important moment for the pound would be the full opening of the UK economy, which is slated for the 20th of this month. The spread of the Indian strain of the coronavirus in the territory creates a number of obstacles to this, which affects the desire of investors to buy the British pound. The best scenario is buying for every good decline in the British pound against the US dollar. The COT report showed that long non-commercial positions fell from 59,238 to 55,203, while short non-commercial positions significantly fell from 31,524 to 23,033. As a result, the non-commercial net position rose from 27,714 to 32,170. Last week's closing price significantly changed and reached 1.4109 against 1.4175.

Indicator signals:

Trading is carried out below 30 and 50 moving averages, which indicates an attempt by the bears to seize the initiative.

Moving averages

Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart.

Bollinger Bands

Surpassing the upper border of the indicator in the area of 1.3950 will lead to a new wave of growth for the pound. A breakthrough of the lower border of the indicator around 1.3891 will increase the pressure on the pound.

Description of indicators

• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
• MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
• Long non-commercial positions represent the total long open position of non-commercial traders.
• Short non-commercial positions represent the total short open position of non-commercial traders.
• Total non-commercial net position is the difference between short and long positions of non-commercial traders.