To open long positions on GBP/USD, you need:
The meetings between the British Prime Minister and EU leaders led to the growth of the British pound yesterday afternoon, as traders expect that a compromise on the Northern Ireland border will be found soon. Buyers will return to the market today after a downward correction in the area of the first support level of 1.2214, where you can open long positions immediately on the rebound. In the absence of a rapid upward movement from this range, it is best to postpone purchases until the test of the minimum of 1.2176, which yesterday was the upper limit of the side channel. The main goal of the bulls will be to update the resistance of 1.2264 and consolidate above, which will continue the upward trend to the highs of 1.2337 and 1.2387, where I recommend taking the profits.
To open short positions on GBP/USD, you need:
Bears will try to keep the level of 1.2264, but the more important task will be to return and consolidate below the support of 1.2214. Most likely, in the first test of this range, buyers will try to return to the market, however, in the absence of demand and a gradual return to the level of 1.2214 closer to the afternoon, sellers can begin to act more actively, which will lead to a decrease in GBP/USD to the low of 1.2176, where I recommend taking profit. In the scenario of growth of the pound in the area of the maximum of 1.2264, it is better to open short positions from there only after the formation of a false breakdown, or sell already on a rebound from the larger levels of 1.2337 and 1.2387.
Indicator signals:
Moving Averages
Trading is above 30 and 50 moving averages, indicating a likely continuation of the pound's growth.
Bollinger Bands
In the case of the pound growth, the upper limit of the indicator in the area of 1.2290 will limit the upward potential. You can open long positions immediately for a rebound after the test of the lower limit of the indicator in the area of 1.2160.
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
