GBP/USD: plan for the European session on July 20 (analysis of yesterday's trade). Pressure on pound returns due to lack

To open long positions on GBP/USD, you need:

The problems for buyers of the British pound are just beginning. Friday's speech by the Bank of England governor kept the pressure on the British pound, and the technical picture that is now looming for the bulls can create serious problems. Buyers of GBP/USD urgently need to return to the level of 1.2571, since consolidating it will be a signal to open long positions and will lead to a break in the current bearish momentum, which has been formed since July 9. A false breakout in the support area of 1.2505 will also help keep the market on the side of the bulls, so in this scenario, I also advise opening long positions while expecting the high of 1.2618 and 1.2668 to be updated, where I recommend taking profits. In case the pair falls below the support of 1.2505, it is best to wait until the low of 1.2446 has been updated or open long positions immediately for a rebound from the 1.2386 area. A special hearing of the UK Treasury will be held today, which may increase volatility in the British pound.

To open short positions on GBP/USD, you need:

Sellers of the pound will wait until a bearish formation from July 9 is completed, and the gradual pushing of the market and the inability of bulls to update the highs is an additional signal for forming a good bearish momentum. All that sellers need today is a breakout and consolidation below the support of 1.2505, which will increase pressure on the pair and lead to a larger sell-off of GBP/USD to the area of new lows of 1.2446 and 1.2386, where I recommend taking profits. Forming a false breakout in the resistance area of 1.2571 will also be an additional signal to open short positions. If buyers break through this area, the short-term bearish momentum may be seriously affected. Therefore, it is best to count on short positions only after updating the high of 1.2618, or sell GBP/USD immediately on a rebound from the larger resistance of 1.2668 based on a correction of 30-40 points within the day.

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Indicator signals:

Moving averages

Trading is just below the 30 and 50 moving averages, which indicates continued pressure on the British pound.

Note: the period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

A break in the lower border of the indicator around 1.2525 will increase the pressure on the pair. Growth will be limited by the upper level of the indicator in the area of 1.2580.

Description of indicators

  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
  • The MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages). Fast EMA period 12. Slow EMA period to 26. The 9 period SMA.
  • Bollinger Bands (Bollinger Bands). The period 20.
  • Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • The total non-commercial net position is the difference between short and long positions of non-commercial traders.
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