In my morning forecast, I paid attention to the level of 1.2961 and planned to make market entry decisions from it. Let's look at the 5-minute chart and analyze what happened there. A decline and the formation of a false breakout at that level led to an excellent entry point for long positions, resulting in the pair rising by more than 30 points. Sales on a false breakout from 1.2986 also allowed for a profit of about 15 points. The technical picture was not revised for the second half of the day.

To open long positions on GBP/USD, the following is required:

The lack of statistics helped the pound continue to rise and even break out beyond the monthly high, but it was unable to consolidate above it. Despite some problems for the bulls, Federal Reserve Chairman Jerome Powell's upcoming speech may lead traders to react with new purchases. In case of a negative reaction to his statements, I expect the first appearance of buyers around 1.2961. The formation of a false breakout there, similar to what I analyzed above, will provide an entry point for long positions, aiming to update the high of 1.2986, where sellers have already shown themselves once today. Therefore, a breakout and a reverse test from top to bottom of this range will strengthen the pound's upward potential, leading to an entry point for long positions with a possibility of testing 1.3011. The farthest target will be the area of 1.3032, where I plan to take profits. In the scenario of GBP/USD declining and a lack of activity from the bulls at 1.2961 in the second half of the day, pressure on the pair will increase. This will also lead to a decline and an update to the next support at 1.2933, where the moving averages, playing on the bulls' side, are located. However, even this will not greatly harm the bullish market. The formation of a false breakout will be a suitable condition for opening long positions. I plan to buy GBP/USD immediately on a rebound from the minimum of 1.2903, targeting an intraday correction of 30-35 points.

To open short positions on GBP/USD, the following is required:

Sellers have already held their ground once today, but Powell's soft tone could lead to a new wave of growth, so be very careful with sales—especially in such a bullish market. In case of continued growth, I prefer to act on sales only after forming a false breakout in the resistance area of 1.2986, similar to what I analyzed above. This will be a suitable option for opening short positions, targeting a decline to the support of 1.2961. A breakout and a reverse test from the bottom to the top of this range will hit the buyers' positions, leading to stop-loss triggering and opening the way to 1.2933, where the moving averages are located. The farthest target will be the area of 1.2903, where I plan to take profits. Testing this level will greatly harm the pound's upward potential but will not change the overall picture. In the case of GBP/USD rising and a lack of activity at 1.2986 in the second half of the day, buyers will have a chance to continue the growth. In this case, I will postpone sales until a false breakout at the level of 1.3011. If there is no downward movement, I will sell GBP/USD immediately on a rebound from 1.3032, but only in anticipation of a downward correction of 30-35 points intraday.

In the COT report (Commitment of Traders) for July 2, there was an increase in long positions and a decrease in short positions. Despite comments from Bank of England representatives on future policy and a likely rate cut in August this year, the pound regained some strength and recovered after a sharp drop caused by the high probability of divergence in policies between the Bank of England and the Federal Reserve. Now traders are awaiting new guidelines from the Fed, which will come from Jerome Powell's speech in Congress and the US inflation data, setting the direction for risk assets for the coming weeks, including the British pound. The latest COT report indicates that long non-commercial positions increased by 4,206 to the level of 106,753, while short non-commercial positions fell by 13,787 to the level of 44,712. As a result, the spread between long and short positions increased by 717.

Indicator Signals:

Moving Averages

Trading is conducted above the 30 and 50-day moving averages, indicating further growth of the pound.

Note: The period and prices of the moving averages are considered by the author on the hourly chart H1 and differ from the general definition of classic daily moving averages on the daily chart D1.

Bollinger Bands

In case of a decline, the lower boundary of the indicator around 1.2961 will act as support.

Indicator Descriptions:

• Moving Average (determines the current trend by smoothing volatility and noise). Period 50. Marked in yellow on the chart.
• 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 - convergence/divergence of moving averages) 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 using the futures market for speculative purposes and meeting 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 positions of non-commercial traders.