26.11.202418:09 Forex Analysis & Reviews: GBP/USD: Trading Plan for the U.S. Session on November 26th (Review of Morning Trades)

In my morning forecast, I highlighted the 1.2561 level and planned to make trading decisions around it. Let's review the 5-minute chart and analyze the developments. A breakout and subsequent retest of 1.2561 created an excellent entry point for buying the pound, resulting in the pair rising by over 30 points. The technical outlook for the second half of the day has been updated.

For Opening Long Positions on GBP/USD:

After weathering recent comments from Trump regarding new trade tariffs, the pound recovered slightly during the first half of the day. Focus now turns to US consumer confidence data, new home sales, and the Federal Reserve meeting minutes. Strong data, particularly an expected increase in consumer confidence, could renew pressure on the pound and strengthen demand for the US dollar.

For this reason, I plan to act on a decline following a false breakout near the new support at 1.2557, established during the first half of the day. The recovery target is resistance at 1.2608. A breakout and retest of this range could provide an entry point for long positions, aiming for a potential rise to 1.2654. The final target is 1.2710, where I plan to take profits.

If GBP/USD falls and bulls show no activity near 1.2557, bears may gain momentum to extend the trend. Only a false breakout near 1.2509 would create an opportunity to open long positions. Alternatively, I plan to buy GBP/USD on a rebound from 1.2464, targeting an intraday correction of 30–35 points.

For Opening Short Positions on GBP/USD:

Pressure on the pound could resume at any time, particularly after strong US data. A false breakout near 1.2608, combined with hawkish Federal Reserve meeting minutes, would provide an entry point for selling, targeting a decline toward the 1.2557 low. Moving averages favoring bulls are located at this level.

A breakout and retest from below this range—already tested earlier—will leave buyers vulnerable. This could trigger stop-loss orders and pave the way to the 1.2509 low. The final target is 1.2464, where I plan to take profits.

If GBP/USD rises and bears show no activity around 1.2608, buyers may extend the correction. Bears may then retreat toward the 1.2654 resistance area. I will only sell at this level following a false breakout. If downward movement fails there as well, I will look for short positions on a rebound near 1.2710, targeting an intraday correction of 30–35 points.

Commitment of Traders (COT) Report

The November 19 COT report revealed a reduction in both long and short positions. While the current figures reflect Donald Trump's presidency, the Bank of England's likely decision to avoid further rate cuts—a stance at odds with the government's efforts to sustain economic growth—has not yet been fully priced in. However, recent PMI data suggests this goal may not be achievable.

Traders are hesitant to buy the pound, but there has been no increase in sellers either. This could be an early sign of a slowdown in the bearish trend for the pair. The latest COT report showed long non-commercial positions fell by 18,279 to 101,713, while short non-commercial positions dropped by 2,544 to 61,398. Consequently, the gap between long and short positions increased by 2,182.

Indicator Signals

Moving Averages:The pair is trading slightly above the 30 and 50-day moving averages, supporting the potential for an upward correction.

Bollinger Bands:If the pair declines, the lower boundary of the Bollinger Bands near 1.2509 will serve as support.

Indicator Descriptions

• Moving Average (MA): Determines the current trend by smoothing volatility and noise.
  • Period – 50: Marked in yellow on the chart.
  • Period – 30: Marked in green on the chart.
• MACD (Moving Average Convergence/Divergence):
  • Fast EMA – Period 12.
  • Slow EMA – Period 26.
  • Signal Line SMA – Period 9.
• Bollinger Bands: Highlights price volatility and potential breakout levels.
  • Period – 20.
• Non-Commercial Traders: Speculative participants, including individual traders, hedge funds, and large institutions.
• Long Non-Commercial Positions: Total open long positions held by non-commercial traders.
• Short Non-Commercial Positions: Total open short positions held by non-commercial traders.
• Net Non-Commercial Position: The difference between speculative traders' long and short positions.