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10.12.202413:18 Forex Analysis & Reviews: GBP/USD: Trading Plan for the U.S. Session on December 10th (Review of Morning Trades). Pound Recovered Around 1.2735

In my morning forecast, I highlighted the 1.2735 level and planned to base market entry decisions on it. Let's analyze the 5-minute chart to see what happened. The decline and subsequent false breakout at this level provided an excellent buying opportunity, resulting in the pair's rise by more than 30 points. The technical outlook for the second half of the day remains unchanged.

Exchange Rates 10.12.2024 analysis

To Open Long Positions on GBP/USD:

The lack of UK economic data was key for buyers defending the 1.2736 level, supporting further development of the bullish market. The forming triangle currently favors the bulls, increasing the chances of a new wave of growth in the second half of the day, particularly given the lack of significant U.S. statistics this afternoon.

Today's U.S. data—such as the NFIB Small Business Optimism Index, labor productivity in the non-manufacturing sector, and labor cost changes—are unlikely to draw much interest.

If buyers fail and pressure on the pair returns, I will focus on the morning support level of 1.2736, applying the same strategy as outlined earlier. Active defense of this area, combined with a false breakout, will provide a good entry point to restore GBP/USD toward the 1.2767 resistance. A breakout and retest from above would offer a new buying opportunity with targets at 1.2796. The ultimate target is 1.2827, where I plan to take profits.

If GBP/USD declines and bulls show no activity around 1.2736, buyers will lose momentum, though the pair will likely remain within a sideways channel for the rest of the day. A false breakout near 1.2711 would be the next suitable condition for opening long positions. I plan to buy GBP/USD on an immediate rebound from the 1.2688 low, targeting a 30–35 point intraday correction.

To Open Short Positions on GBP/USD:

Selling pressure on the pound may return if buyers show weak activity near the immediate resistance at 1.2767. A false breakout at this level would provide a selling opportunity, targeting the 1.2736 support. A breakout and retest of this range from below would trigger stop-loss orders and open the path to 1.2711, which would deal a significant blow to bullish positions by breaking the lower boundary of the triangle. The ultimate target is 1.2688, where I plan to take profits.

If pound demand persists in the second half of the day, which seems likely, and GBP/USD rises without significant bearish activity at 1.2767, buyers will gain a solid chance to further develop the bullish market. In this case, bears would retreat to the 1.2796 resistance. I plan to sell only after a false breakout at that level. If no downward movement occurs there, I will consider short positions on a rebound from 1.2827, targeting a 30–35 point downward correction.

Exchange Rates 10.12.2024 analysis

Commitments of Traders (COT) Report:

The COT report for December 3 showed a reduction in long positions and an increase in short ones. The Bank of England's next move on interest rates remains uncertain. Weak GDP data expected soon could shift focus back to rate cuts, exerting additional pressure on the pound against the U.S. dollar. If this does not happen, buyers may have an opportunity for more significant growth in GBP/USD.

The latest COT report indicated that long non-commercial positions decreased by 403 to 98,056, while short non-commercial positions increased by 1,905 to 78,730, narrowing the gap between long and short positions by 947.

Exchange Rates 10.12.2024 analysis

Indicator Signals:

  • Moving Averages: Trading is near the 30- and 50-day moving averages, indicating market uncertainty.
  • Bollinger Bands: In the event of a decline, the lower boundary of the indicator at 1.2725 will act as support.

Key Indicator Definitions:

  • Moving Average (SMA): Smoothens volatility to identify trends.
  • MACD Indicator: Tracks the convergence/divergence of moving averages.
  • Bollinger Bands: Measures volatility and identifies potential support/resistance.
  • Non-commercial traders: Speculators such as hedge funds and institutions using futures markets for profit.
  • Long/short positions: Represent cumulative bullish or bearish speculative trades.

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