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plan for the American session on January 21 (analysis of morning deals). Pound buyers seek renewed highs

DATE OF PUBLICATION: 2021-01-21 16:34:37 ​​To open long positions in GBP / USD, it is required: these attractive prices. After rising to the new resistance at 1.3716, the bulls tried to consolidate above this range, and they succeeded. The reverse test of the level 1.3716 from top to bottom formed a good signal for the continuation of the uptrend. However, as we can see on the chart, there has not been any active growth from the level of 1.3716, which may lead to the formation of a large downward correction, similar to yesterday. In the scenario of a breakout and consolidation of GBP / USD below 1.3716, I recommend exiting long positions and waiting for the pound to decline to the area of ​​the larger 1.3669 level, from where you can open long positions immediately on a rebound with the aim of recovering by 20-25 points within the day. The moving averages, playing on the side of the buyers of the pound, are also located there. If the bulls continue to push the pair up, it is quite possible that a breakout will occur and consolidation above the resistance of 1.3750, to which we have not reached literally 5 points today. The test of this area from top to bottom forms another entry point into long positions with the main target of reaching the high of 1.3803, where I recommend taking profits. To open short positions on GBP / USD, it is required: After the next renewal of the annual high, the bears have lost all hope of building a downward correction today … Therefore, only consolidation below support 1.3716 and testing it from the reverse side will lead to a signal to open short positions in order to reduce the pound to the support area 1.3669, where I recommend taking profits. A further target will be the minimum of 1.3624, but getting to it today will be quite problematic. If the bulls continue to push the pair up, then I recommend looking at short positions only after a false breakout in the 1.3750 area, and I recommend selling GBP / USD immediately to a rebound from a high of 1.3803 with the aim of a downward correction of 20-25 points within the day. As a reminder, the COT reports (Commitment of Traders) for January 12 recorded an increase in long and short positions, but there were more of the former, which led to an increase in the delta. Long non-commercial positions increased from 35 526 to 47 935. At the same time, short non-commercial positions increased from 31 861 to 34 993. It can be seen that sellers turned out to be much less than new buyers. As a result, the non-profit net position rose to 12,942, against 3,665 a week earlier. All this suggests that traders continue to bet on the strengthening of the pound, even in the face of the new Covid-19 strain, for which there is no vaccine yet. The demand for the pound is limited by quarantine measures in the UK, which will sooner or later be canceled after the infection situation stabilizes. The Bank of England’s recent abandonment of negative interest rates and the decline in the pound earlier this year have brought many large medium-term buyers back into the market looking for a continuation of the bull market this spring. Indicator Signals: Moving Averages Traded above 30 and 50 day averages. which indicates a further upward movement of the pound. Note: The period and prices of moving averages are considered by the author on the hourly H1 chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands indicators Moving average (moving average, determines the current trend by smoothing volatility and noise). Period 50. Marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing volatility and noise). Period 30. Marked in green on the chart. MACD indicator (Moving Average Convergence / Divergence – moving average convergence / divergence). 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 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 non-commercial traders. The total non-commercial net position is the difference between short and long positions of non-commercial traders. Material provided by InstaForex – Source – InstaForex

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