In my morning forecast, I highlighted the 1.2680 level as a key reference point for entering the market. Looking at the 5-minute chart, the upward movement occurred, but the price never reached the 1.2680 level to form a false breakout, leaving me without any trades. The technical picture for the second half of the day remains unchanged.

Conditions for Opening Long Positions on GBP/USD

The absence of significant UK economic data led to a sharp decline in market volatility, but buyers still managed to push the price toward 1.2680 resistance. I expect that the upcoming US GDP data and personal consumption expenditures (PCE) index will provide new trading opportunities. Additionally, speeches from FOMC members Michelle Bowman and Michael S. Barr should be monitored.

If sellers attempt to drive the market lower, I will consider long positions only after a false breakout at 1.2642, targeting resistance at 1.2680, which was not reached earlier today. A breakout and retest from above of this range would confirm a new buy entry, potentially leading to an update of the weekly high at 1.2711. The final target for long positions is 1.2750, where I will take profits.

If GBP/USD declines and buyers fail to hold 1.2642, bearish pressure will likely increase. In this scenario, I will wait for a false breakout near the 1.2607 low before considering a long entry. If the pair continues to decline, I will only buy from 1.2563, aiming for a 30-35 point intraday correction.

Conditions for Opening Short Positions on GBP/USD

Sellers missed their chance earlier in the session, but the most significant events are yet to come. US economic data and FOMC commentary will be key in shaping further price action. The primary task for bears is to defend the 1.2680 resistance level. A false breakout at this level will serve as a sell signal, aiming for support at 1.2642. A break below this range, followed by a retest from below, would lead to stop-loss triggering, opening the path toward 1.2607. The final downward target for short positions is 1.2563, where I plan to take profits.

If GBP demand returns in the second half of the day and bears fail to hold the 1.2680 level, the bullish trend will extend. In this case, I will postpone short positions until 1.2711, selling only after a failed breakout attempt. If there is no bearish response at 1.2711, I will consider short entries from 1.2750, aiming for a 30-35 point downward correction.

Commitments of Traders (COT) Report

The COT report from February 18 showed an increase in both long and short positions, but the rise in long positions was greater, indicating continued demand for the pound. The near-equal positioning of buyers and sellers reflects a balanced market.

With UK inflation and retail sales data continuing to push the Consumer Price Index (CPI) higher, the Bank of England (BoE) may adopt a more cautious stance on rate cuts, which could support the pound in the medium term.

According to the COT report, long speculative positions increased by 4,477, reaching 73,477, while short positions rose by 1,888, totaling 74,143. As a result, the long-to-short gap narrowed by 3,870.

Indicator Signals

The moving averages suggest market uncertainty, as GBP/USD trades near the 30 and 50-day moving averages.

The Bollinger Bands indicate that the lower boundary at 1.2642 will act as support in case of further declines.

Indicator Breakdown

• Moving Averages (MA50 and MA30) smooth market noise and define current trends. The 50-period moving average is marked in yellow, and the 30-period moving average in green.
• MACD (Moving Average Convergence/Divergence) measures trend strength and momentum using EMA 12, EMA 26, and SMA 9.
• Bollinger Bands (BB, period 20) indicate volatility levels and potential price reversals.
• Non-commercial traders include speculators, hedge funds, and large institutions that trade futures for speculative purposes.
• Long non-commercial positions represent the total long positions held by speculative traders.
• Short non-commercial positions represent the total short positions held by speculative traders.
• The net non-commercial position is the difference between long and short speculative contracts.