26.05.202515:03 Forex Analysis & Reviews: GBP/USD: Trading Plan for the U.S. Session on May 26th (Review of Morning Trades)

In my morning forecast, I focused on the 1.3570 level and planned to make entry decisions around it. Let's look at the 5-minute chart and analyze what happened. A decline and the formation of a false breakout at that level provided a buy signal for the pound, resulting in a 20-point rise, but the move didn't extend much beyond that. The technical outlook was revised for the second half of the day.

To Open Long Positions on GBP/USD:

The lack of major U.S. data could be a key factor that allows the pound to recover some of the ground it lost against the dollar earlier in the day. However, given the absence of major buyers and overall interest, I prefer to act near the newly formed support at 1.3545, established during the first half of the day.

A false breakout at 1.3545 will be a good buying opportunity, targeting a recovery toward resistance at 1.3586. A breakout with a successful retest of this range from above will provide a new long entry point with the potential to retest 1.3612, further strengthening the bullish market. The furthest target will be 1.3637, where I plan to take profit.

If GBP/USD drops and buyers fail to appear at 1.3545 in the second half of the day, pressure on the pound may increase. In that case, only a false breakout near 1.3510 would be a valid buying signal. Otherwise, I'll look to open long positions on a rebound from 1.3474, aiming for an intraday correction of 30–35 points.

To Open Short Positions on GBP/USD:

Sellers have shown some presence, but it's still within the framework of a minor correction in a strong bullish market, so there's little reason for bears to celebrate.

I'll act only if GBP/USD rallies again. A false breakout around 1.3586 (resistance formed earlier in the day) will signal a short entry targeting support at 1.3545. A breakout and retest of this zone from below would trigger stops and pave the way toward 1.3510, where the moving averages currently support the bulls. The final target would be 1.3474, where I plan to take profit.

If demand for the pound returns and bears do not defend 1.3586, it's better to postpone short positions until the test of 1.3612. Shorts from there are only valid on a failed breakout. If no downward reaction occurs at that level, I'll look to sell from 1.3637, aiming for a 30–35 point pullback.

COT (Commitment of Traders) Report – April 29:

The latest COT report showed a decline in both long and short positions. Since the Bank of England and the U.S. Federal Reserve are not expected to cut interest rates in the near future, traders will likely shift their focus to new fundamental data that could clarify the state of the UK economy and the impact of Trump's new tariffs. Long non-commercial positions fell by 2,957 to 91,064. Short non-commercial positions dropped by 6,426 to 67,105. The gap between long and short positions increased by 12,776.

Indicator Signals:

Moving Averages: Trading is currently above the 30- and 50-period MAs, which indicates continued bullish momentum for the pound.Note: The author uses H1 (hourly) settings, which may differ from classic daily (D1) moving averages.

Bollinger Bands: If the pair declines, the lower band near 1.3510 will act as support.

Indicator Descriptions:

• Moving Average (MA): Smooths price fluctuations to identify trend direction
  • 50-period MA (yellow)
  • 30-period MA (green)
• MACD (Moving Average Convergence/Divergence):
  • Fast EMA – 12
  • Slow EMA – 26
  • Signal SMA – 9
• Bollinger Bands: Period – 20
• Non-commercial traders: Speculators (retail traders, hedge funds, large institutions) using the futures market for speculation
• Long non-commercial positions: Total long open positions by non-commercial traders
• Short non-commercial positions: Total short open positions by non-commercial traders
• Net non-commercial position: Difference between long and short positions