To open long positions on GBP/USD you need:
Yesterday's report on a decrease in business activity in the service sector, as well as the uncertainty of the Brexit deal are forcing buyers to take profits on the pound. However, in general, the current downward correction still does not jeopardize the upward trend formed at the beginning of this month. The bulls need a return to the resistance of 1.3316, which will increase the demand for the pound and lead to a larger upward correction in the area of 1.3378 and 1.3450. Yesterday I paid attention to support at 1.3265, which performed its function. The formation of a false breakout on it in the morning, along with good data on the UK labor market will be a good signal to open long positions in GBP/USD. Under the scenario of further downward correction, the bulls will begin to act more at lows of 1.3218 and 1.3164, where an attempt will also be made to build the lower boundary of the upward price channel to continue the pound's growth.
To open short positions on GBP/USD you need:
Bears are gradually pushing the pound down and now their main task will be to return to the support level of 1.3265, as it was yesterday with the level of 1.3378 after the data on the service sector. A weak report on the UK labor market may repeat the fate of 1.3378, but already in the area of 1.3265, which will lead to a downward correction to the low of 1.3218 and 1.3164, where I recommend taking profits. Under an upward trend scenario, the formation of a false breakout at 1.3316 will be the first signal to sell the pound. Otherwise, it is best to open short positions only after an update of 1.3378, in order to correct 20-30 points down within the day, or sell immediately for a rebound from the high of 1.3450.
Signals of indicators:
Moving averages
Trade is conducted below 30 and 50 moving averages, which indicates that the pound could possibly fall in the short term.
Bollinger bands
In case the pound falls, support will be provided by the lower boundary of the indicator at 1.3316. A break above the upper level of the indicator at 1.3410 will lead to a new wave of pound growth.
Description of indicators
- Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
- Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
- MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
- Bollinger Bands (Bollinger Bands). Period 20
