In my morning forecast, I highlighted the 1.2980 level as a key area for making market entry decisions. Let's analyze the 5-minute chart to see what happened. A break and retest of 1.2980 provided a good entry point for short positions, but the pair failed to develop a significant downward movement. The technical outlook has been revised for the second half of the day.

For Opening Long Positions on GBP/USD:

The pound weakened in the first half of the day ahead of crucial announcements from the Federal Reserve, but so far, this remains just a minor correction. The FOMC's interest rate decision and economic outlook will be key events, but the most critical factor is what Fed Chair Jerome Powell has to say during his press conference.

If the market reacts bearishly to Powell's statements, then only a false breakout around 1.2958 will provide a good entry point for long positions, targeting a recovery to 1.3006, the weekly high. A break and retest of this level will confirm a buying opportunity, potentially pushing the pair toward 1.3035, strengthening the bullish trend. The ultimate target would be 1.3068, where I plan to take profits.

If GBP/USD declines and shows no buying activity at 1.2958, bearish pressure on the pound will intensify significantly, affecting its bullish outlook. In this case, a false breakout around 1.2912 would serve as a suitable condition for opening long positions. I will consider buying on a direct rebound from 1.2876, targeting a 30-35 point intraday correction.

For Opening Short Positions on GBP/USD:

The pound's decline in the first half of the day was more of a pre-Fed correction than a result of active selling pressure. The key resistance level of 1.3006 remains the main focus during the US session. A false breakout at this level will provide an opportunity to sell GBP/USD, targeting 1.2958.

A break and retest below this range will lead to a stop-loss cascade, opening the path to 1.2912, which would represent a notable correction. The final target would be 1.2876, where I plan to take profits. A test of this level could halt the bullish momentum.

If demand for the pound remains strong after the FOMC decision, and bears fail to defend 1.3006, then selling should be postponed until the pair tests 1.3035. I will only enter short positions on a false breakout at this level. If no downward movement occurs there, I will look for short entries around 1.3068, aiming for a 30-35 point intraday correction.

Commitment of Traders (COT) Report:

The COT report from March 11 showed a rise in both long and short positions, but long positions increased significantly more, strengthening the bullish sentiment on GBP/USD. The positive UK economic outlook and the Bank of England's cautious approach to rate cuts support the pound's uptrend.

The upcoming Fed meeting could weaken the dollar further, which means pound buyers still have little reason to worry. However, corrections are likely along the way before testing new local highs.

The COT report shows that long non-commercial positions increased by 12,920 to 94,786, while short non-commercial positions rose by only 2,301 to 65,593. As a result, the gap between long and short positions widened by 10,925.

Indicator Signals:

Moving Averages: Trading is occurring around the 30- and 50-day moving averages, signaling market uncertainty.

Bollinger Bands: If the pair declines, the lower boundary of the indicator near 1.2958 will act as support.

Indicator Descriptions:

• Moving Averages (smooth volatility and noise to identify trends):
  • 50-period SMA – Yellow on the chart
  • 30-period SMA – Green on the chart
• MACD Indicator (Moving Average Convergence/Divergence):
  • Fast EMA (12), Slow EMA (26), SMA (9)
• Bollinger Bands (volatility-based price bands):
  • 20-period setting
• Non-commercial traders: Speculative market participants, such as individual traders, hedge funds, and large institutions using futures for speculative purposes.
• Long non-commercial positions: The total open long positions held by speculative traders.
• Short non-commercial positions: The total open short positions held by speculative traders.
• Net non-commercial position: The difference between short and long positions among speculative traders.