To open long positions on GBP/USD, you need:
Buyers of the pound clearly retreated from the market after the Bank of England's recent decision to lower interest rates and provide significant support to the economy. A small rebound from the 1.2522 area, which I paid attention to yesterday in my review, led only to a correction, which is now limited to the resistance of 1.2605. Buyers will solely focus their attention on this level in the first half of the day. Its breaks with consolidation above will resume the pound's growth and will allow you to update the areas of 1.2686 and 1.2744, where I recommend taking profits, since this is where the moving averages pass. In the scenario of a further fall in GBP/USD, it is best to return to long positions on the test of the lows of 1.2417, 1.2385 and 1.2353, and the lower the better.
To open short positions on GBP/USD, you need:
Sellers face a simpler task to break through and consolidate below the 1.2522 support, from which the pound bounced up yesterday after a major drop inside the day. This will allow us to continue the bearish trend and achieve the update of new lows in the area of 1.2417 and 1.2353, where I recommend taking profits. However, a better time to open short positions will be when a false breakout forms in the resistance area of 1.2605, while GBP/USD can immediately be sold on the rebound from the highs of 1.2686 and 1.2744. Given that important fundamental statistics on the UK economy are not released today, the volatility of the pound will also depend on news about the negotiations between the UK and the EU, which have taken a back seat to the threat of the spread of the coronavirus.
Signals of indicators:
Moving averages
Trading is conducted below 30 and 50 moving average, which indicates a continuation of the bearish trend.
Bollinger bands
In the event of a decline, support will be provided by the lower boundary of the indicator in the region of 1.2482. In case of an upward correction, growth will be limited in the region of the upper boundary in the area of 1.2686, from where you can sell the pound immediately for a rebound.
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
