To open long positions on GBP/USD, you need:
Last week, the British Prime Minister agreed with EU leaders on the preparation of an agreement on the border with Ireland, which will help to solve the problem of Brexit, after which the pound strengthened against the US dollar. At the moment, buyers are faced with the task of breaking and consolidating above the resistance of 1.2283, which will provide the market with new support from major players and further growth in the area of highs of 1.2334 and 1.2387, where I recommend taking the profits. If the bulls fail to cope with the resistance of 1.2283, and there are few agreements to seriously strengthen the pound, then we can consider new long positions in the short term, from the support of 1.2216, subject to a false breakdown, or rebound from a larger level of 1.2173.
To open short positions on GBP/USD, you need:
The bears will try to keep the level of 1.2283, and only the next formation of a false breakdown will allow playing the scenario of returning to the level of 1.2216, which will then lead to a decrease in GBP/USD to the area of the low of 1.2173, where I recommend taking the profit. If the pound continues to grow along with the trend above the maximum of 1.2283, it is best to open short positions after updating the resistance of 1.2334 or to rebound from a larger area of 1.2387. Any negative news on the Irish border can quickly return large GBP/USD sellers to the market.
Signals of indicators:
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 1.2310 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 1.2220.
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
