GBP/USD: plan for the European session on January 21. Pound data disappointed buyers

To open long positions on GBP/USD you need:

A weak UK retail sales report quickly dampened the buying power of the pound, which led to a return to the side channel area. Currently, bulls need a quick return and consolidation above the resistance of 1.2890, which will lead to a larger upward trend in the area of a high of 1.2944 and 1.3006, where I recommend to fix profits. Any news from British Prime Minister Theresa May on Brexit could lead to a surge in pound volatility. In the scenario of its further decline, it is best to look closely at long positions in the false breakdown around 1.2822 or at a rebound from 1.2752.

To open short positions on GBP/USD you need:

An unsuccessful consolidation above the resistance of 1.2890 will be the first signal to open short positions in the pound, but the main task will be a breakthrough of support at the level of 1.2822, which will lead to the demolition of a number of stop orders of buyers and a larger downward correction to 1.2752 and 1.2679, where I recommend to take profits. In the case of an uptrend on the news on Brexit, it is best to consider short positions from the highs around 1.2944 and 1.3006.

Indicator signals:

Moving averages

Trade is conducted below the 30-day and 50-day moving, which indicates the next change of trend in the market.

Bollinger bands

In case the pound decreases, it is possible to open long positions immediately after an update of the lower border of the Bollinger Bands indicator near 1.2822. The upper limit around 1.2925 will act as a resistance.


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
The material has been provided by InstaForex Company -