11.12.202413:59 Forex Analysis & Reviews: GBP/USD: Plan for the U.S. Session on December 11 (Review of Morning Trades). Pressure on the Pound Returns

In my morning forecast, I focused on the level of 1.2758 and planned to make trading decisions based on it. Let's look at the 5-minute chart and analyze what happened. A breakout and retest of 1.2758 from below provided an excellent entry point for selling the pound, resulting in a significant drop to the support level of 1.2725, yielding more than 30 points of profit. The technical picture has been revised for the second half of the day.

To Open Long Positions on GBP/USD:

Considering how quickly pressure returned to the British pound, even in the absence of significant UK statistics, the pair's future upward prospects will entirely depend on U.S. inflation data. An increase in inflation would give the Federal Reserve reason to pause its rate-cutting pace, strengthening the dollar and causing further pound sell-offs. Otherwise, bulls could rebound from the new support at 1.2717, maintaining chances for a recovery.

A false breakout at 1.2717 will provide a good entry point for buying, aiming for a rebound of GBP/USD toward the resistance at 1.2756, which served as support earlier in the day. A breakout and retest of this range from above will create a new entry point for long positions, targeting 1.2796. The ultimate target will be the 1.2827 level, where I plan to take profits.

If GBP/USD declines and there is no bull activity around 1.2717—likely coupled with strong U.S. data—it could lead to a breach of the lower boundary of the sideways channel. In this case, only a false breakout near the next support level at 1.2688 will provide a suitable condition for opening long positions. I will buy GBP/USD immediately on a rebound from the 1.2660 low, aiming for a 30-35 point correction within the day.

To Open Short Positions on GBP/USD:

If the pound rises following the data, defending the nearest resistance at 1.2756 will be a priority for sellers. A false breakout there will provide an entry point for short positions, targeting the lower boundary of the sideways channel and support at 1.2717, which was established earlier in the day. A breakout and retest of this range from below will trigger stop-loss orders, opening the path toward 1.2677, which would be a significant blow to the bulls. The ultimate target will be the 1.2688 level, where I plan to take profits.

If demand for the pound persists in the second half of the day—likely only if U.S. data is weak—and GBP/USD rises without activity at 1.2756 (where moving averages favor sellers), buyers will have a good chance to establish a bullish trend. In this case, sellers will retreat toward the resistance at 1.2796, where I will sell only after a false breakout. If there is no downward movement there, I will look for short positions on a rebound near 1.2827, targeting a 30-35 point downward correction within the day.

The COT Report (Commitment of Traders) for December 3 showed a decrease in long positions and an increase in short positions. The Bank of England's next steps regarding interest rates remain uncertain. However, in the event of weak GDP data expected soon, the likelihood of rate cuts will rise, putting pressure on the pound against the U.S. dollar. If this does not occur, buyers will have a chance for a more significant recovery in the GBP/USD pair. According to the latest COT report, long non-commercial positions decreased by 403 to 98,056, while short non-commercial positions increased by 1,905 to 78,730. As a result, the gap between long and short positions narrowed by 947.

Indicator Signals:

• Moving Averages: Trading is below the 30- and 50-day moving averages, indicating further potential declines.
  • Note: The moving averages referenced by the author are on the hourly H1 chart and differ from classic daily moving averages on the D1 chart.
• Bollinger Bands: The lower boundary of the indicator around 1.2717 will act as support in case of a decline.

Indicator Descriptions:

• Moving Average (MA): Identifies the current trend by smoothing volatility and noise. Period – 50 (yellow on the chart); Period – 30 (green on the chart).
• MACD Indicator: (Moving Average Convergence/Divergence – convergence/divergence of moving averages). Fast EMA – period 12. Slow EMA – period 26. SMA – period 9.
• Bollinger Bands: Period – 20.
• Non-Commercial Traders: Speculators, such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes.
• Long Non-Commercial Positions: Total long open positions held by non-commercial traders.
• Short Non-Commercial Positions: Total short open positions held by non-commercial traders.
• Net Non-Commercial Position: The difference between short and long positions held by non-commercial traders.