To open long positions on GBP/USD it is required:
Today, the Bank of England will decide on interest rates, which are likely to remain unchanged. You can expect to buy the pound only after a return and consolidation above the resistance of 1.2658, which will keep the upward momentum of the pound in the resistance area of 1.2705, where I recommend to lock in the profit. In the event of a decline in the GBP/USD in the first half of the day to the support area of 1.2609, it is best to open long positions from there when forming a false breakout. In case of a negative reaction to the decision of the Bank of England, I recommend considering new purchases of the pound only after updating the lows in the area of 1.2566 and 1.2527.
To open short positions on GBP/USD it is required:
Short positions in the pound are best to look for after an unsuccessful consolidation above the resistance of 1.2658, which will indicate the absence of buyers in the market. A weak report from the Bank of England may lead to a re-test and a breakdown of support at 1.2609, which will increase the pressure on GBP/USD and sharply pull down the pair to a low in the area of 1.2566 and 1.2527, where I recommend taking profits. If the pound rises above 1.2658, short positions can be opened immediately on the rebound from the weekly high of 1.2705.
Indicator signals:
Moving averages
Trading is conducted just below the 30-day and 50-day moving averages, with the short-term advantage of sellers of the British pound.
Bollinger Bands
The downward correction in the pair will be limited by the lower limit of the Bollinger Bands indicator in the area of 1.2597, the breakthrough of which will lead to a major sell-off of the pound. The upper limit of the indicator in the area of 1.2670 limits the upward correction in the pound.
Description of indicators
- MA (moving average) 50 days - yellow
- MA (moving average) 30 days - green
- MACD: fast EMA 12, slow EMA 26, SMA 9
- Bollinger Bands 20
