To open long positions on GBP/USD you need:
Yesterday's Brexit news and statements by the British Conservative Party leader Boris Johnson helped the pound strengthen its position against the US dollar, but so far failed to break through the highs of this month, as the pound needs more compelling reasons for growth and new results of opinion polls. Like yesterday afternoon, at the moment, the bulls are focused on the resistance of 1.2966, which could not be broken above. Consolidation at this level will lead to the continuation of the upward trend formed on November 7, which will reach the highs in the areas of 1.3017 and 1.3074, where I recommend profit taking. With a downward correction, it is best to count on the pound's purchases only after the formation of a false breakout in the support area of 1.2938, or to buy immediately for a rebound from a low of 1.2909. Any positive Brexit news will support the pound, but a downward correction will occur only with a scenario of more pronounced changes in the current political race towards the victory of the Labour Party.
To open short positions on GBP/USD you need:
Sellers continue to keep the pair below the resistance of 1.2966, and while trading is under this range, pressure on the pound will remain. The next formation of a false breakout in this area will be a signal to open short positions, but a more important task for pound sellers will be to return to the support of 1.2938, a break of which will push GBP/USD to lows 1.2909 and 1.2869, where I recommend profit taking. The release of important fundamental data is not expected, so the bulls can continue to push the pound up. If the further growth of the pair will lead to a breakout of the resistance of 1.2966, then in this scenario it is best to consider short positions after updating the high of 1.3017, and also sell the pound immediately for a rebound from 1.3074.
Signals of indicators:
Moving averages
Trade is conducted above 30 and 50 moving averages, which indicates continued growth of the pound in the short term.
Bollinger bands
The upward movement will be limited by the upper indicator level at 1.2966, from where it is possible to open short positions after the formation of a false breakout. In case the pound falls, support will be provided by the lower boundary of the indicator in the area of 1.2940, the break of which will increase the pressure on the pound and lead to its decrease.
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
