To open long positions on GBP/USD you need:
The good news that the UK government has drafted changes to the Brexit agreement related to the Irish border and is ready to submit them today has returned demand for the British pound last Friday. At the moment, the target of the bulls is the resistance of 1.2496, however, a larger growth above this range may be limited by the highs of 1.2534 and 1.2563, where I recommend taking profit on long positions. Also, the likelihood of divergence on the MACD can hinder growth. A more optimal scenario for GBP/USD purchases would be a downward correction and the formation of a false breakdown in the support area of 1.2446. Otherwise, it is best to open long positions immediately on the rebound from a low of 1.2397.
To open short positions on GBP/USD you need:
Bears will be waiting for the result of the meeting between Boris Johnson and Juncker, as well as the formation of divergence on the MACD indicator, which may occur after an update of resistance at 1.2496 today in the morning. However, the main task of sellers is to break through and consolidate below the support of 1.2446, which will raise pressure on GBP/USD and push the pair even lower to the support area 1.2397 and 1.2345, where I recommend taking profits. If the meeting is successful, this will be an additional incentive for growth above the resistance of 1.2496. In this scenario, it is best to consider new short positions in the pound after updating the highs of 1.2534 and 1.2563.
Signals of indicators:
Moving averages
Trade is conducted above 30 and 50 moving averages, which indicates that the pound will continue to grow.
Bollinger bands
In case the pound declines, support will be provided by the lower boundary at 1.2446. A breakthrough of the upper boundary of the indicator in the region of 1.2500 may lead to a new wave of growth for the pair.
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
