To open long positions for GBP/USD, it is required:
The issue of Ireland's border seems to have been resolved, and consensus has been reached. This became known yesterday, which allows us to count on the solution of other, smaller issues in the Brexit agreement. It also retains hope for the continued growth of the pound. The breakout of the resistance of 1.3011 and the upper limit of the downward channel on the chart can lead to the continuation of the upward trend in the GBP/USD with the update of the highs of 1.3099 and 1.3163, where I recommend taking profit. In case the pound declines in the first half of the day, the formation of a false breakout in the support area of 1.2949 will also be a signal to open long positions. Otherwise, you can buy on a rebound from 1.2877.
To open short positions for GBP/USD, it is required:
Weak inflation data in the UK can significantly limit the upward potential of the pound and return sellers to the market. An unsuccessful consolidation above the resistance of 1.3011 will be a signal to open short positions in order to reduce to the area of the first support of 1.2949, the breakdown of which will lead to a larger sell-off of the GBP/USD with a minimum test of 1.2877, where I recommend taking profit. If the data is better than expected, a break of 1.3011 will lead to an increase in the pound. In this scenario, it is best to open short positions by rebounding from the highs of 1.3099 and 1.3163.
Indicator signals:
Moving averages
Trade has moved above the moving average, and the 30-day breaks up from the 50-day moving average, indicating a continuation of the upward correction for the pound.
Bollinger bands
The upper limit of the Bollinger Bands indicator, located in the area of 1.1045, can limit the upward potential in a pound, so you can see sales during the test. In case the pound declines, the lower limit of the indicator in the area of 1.2922 will be a good level for buying.
Indicator description
- Moving Average (average sliding) 50 days - yellow
- Moving Average (average sliding) 30 days - green
- MACD: fast EMA 12, slow EMA 26, SMA 9
- Bollinger Bands 20
