To open long positions on GBP/USD you need:
Friday's pound growth continued after a slight downward correction amid news about the infection of British Prime Minister Boris Johnson with coronavirus. However, growth is gradually slowing, since breaking through the bulls above sufficiently large levels of resistance, without good reason, will be much more difficult than buying from the 1985 lows. At the moment, buyers will focus on maintaining support at 1.2335, since only the formation of a false breakout at this level will lead to continued growth of GBP/USD to the resistance area of 1.2487, a breakthrough of which will provide a direct route to the highs of 1.2605 and 1.2686, where I recommend taking profit. In the scenario of further correction of the pound to the level of 1.2335, there is no need to rush to open long positions. It is best to wait for the 1.2150 support test, where the 50-day moving average also takes place, or buy immediately for a rebound from a low of 1.1985.
To open short positions on GBP/USD you need:
Pound sellers need to try to return the market under their control, and for this you just need to gain a foothold below support 1.2335. A breakthrough of this level after data on lending in the UK could lead to a larger sell-off of GBP/USD to the low of 1.2150 and 1.1985, where I recommend taking profits. Support test 1.1985 will also indicate the resumption of the bear market. In the scenario of an attempt by the bulls to resume the upward trend, only the formation of a false breakout in the resistance area of 1.2487 will be the first signal to open short positions. Otherwise, selling the pound for a rebound is best from the highs of 1.2605 and 1.2686.
Signals of indicators:
Moving averages
Trade is conducted above 30 and 50 moving averages, which indicates continued growth of the pound.
Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.
Bollinger bands
Growth will be limited by the upper level of the indicator in the 1.2535 area. In case the pair falls, purchases can be seen immediately on the rebound from the lower boundary of the indicator in the region of 1.2170.
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
