In my morning forecast, I highlighted the level of 1.2891 and planned to base entry decisions on it. Let's look at the 5-minute chart and see what happened. A drop and the formation of a false breakout at that level provided an entry point for long positions, resulting in a 40+ point rise in the pair. However, pressure on the pound soon returned. The technical outlook has been revised for the second half of the day.

To Open Long Positions on GBP/USD:

Pound buyers attempted to regain control, but their efforts weren't strong enough to reverse the bearish trend from the end of last week. Even weak U.S. consumer credit data is unlikely to change sentiment in the second half of the day, so rushing into long positions is not advisable. Better to listen to FOMC member Adriana D. Kugler, although she's unlikely to say anything that wasn't already said by Jerome Powell last Friday.

If the pair declines, I prefer to act near the 1.2831 support, formed during the early Asian session today. A false breakout at that level, similar to what I discussed earlier, will provide a good entry point for long positions with the goal of recovering toward the 1.2878 resistance. A breakout and retest of this range from top to bottom would signal a new long entry opportunity, aiming to update 1.2929. The furthest target will be the 1.2986 area, where I plan to take profit.

If GBP/USD continues to fall and bulls are inactive around 1.2831, things could go very badly for buyers, and pressure on the pound will likely intensify at the start of the week. In that case, only a false breakout near 1.2766 would provide a reason to open long positions. I also plan to buy GBP/USD on a rebound from 1.2721 with an intraday correction target of 30–35 points.

To Open Short Positions on GBP/USD:

Pound sellers made their presence known in the first half of the day, even without relevant UK statistics. If GBP/USD rises during the U.S. session following Fed commentary, only a false breakout around 1.2878 will offer an entry point for shorts, aiming for a drop toward the new support at 1.2831.

A breakout and retest of this range from the bottom up will trigger stop-loss orders, opening the way to 1.2766, which would deal a serious blow to pound buyers. The furthest target will be 1.2721, where I plan to take profit. A test of this level may push the pair back into a broader bearish market.

If demand for the pound returns in the second half of the day and bears fail to act near 1.2878, then I will delay short positions until a test of resistance at 1.2929, where the moving averages are located, currently favoring the sellers. I will open short positions there only after a failed breakout. If there's no downward move there either, I'll look for shorts on a rebound from 1.2986, aiming for a 30–35 point intraday correction.

COT (Commitment of Traders) Report:

The March 25 report showed an increase in long positions and a decrease in short ones. Buying pressure on the pound continues, which is evident on the chart. While many risk assets have declined, GBP/USD shows stability.

Taking into account recent inflation data from the UK and comments from Bank of England officials, the regulator will likely keep its current policy unchanged at the upcoming April meeting, which could temporarily support the pound. However, much will depend on the broader impact of U.S. tariffs. If the threat of a global economic slowdown increases, pressure on risk assets—including the pound—will also grow.

The latest COT report shows that long non-commercial positions rose by 13,075 to 109,016 and short non-commercial positions decreased by 1,806 to 64,733. The net gap between long and short positions narrowed by 1,548.

Indicator Signals:

Moving Averages: Trading is occurring below the 30- and 50-day moving averages, indicating a bearish market for the pair.

Note: The moving averages are based on the H1 chart and may differ from the classic D1 moving averages.

Bollinger Bands: In the event of a decline, the lower boundary of the indicator near 1.2831 will act as support.

Indicator Descriptions:

• Moving Average: Defines the current trend by smoothing volatility and noise.
  • 50-period (yellow)
  • 30-period (green)
• MACD (Moving Average Convergence/Divergence)
  • Fast EMA – period 12
  • Slow EMA – period 26
  • Signal line (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 interest held by non-commercial traders.
• Short non-commercial positions: Total short open interest held by non-commercial traders.
• Net non-commercial position: The difference between short and long non-commercial positions.