To open long positions on GBP/USD you need:
Yesterday, the pair returned to 1.2350, which I mentioned in my afternoon forecast, causing the British pound to fall. This is clearly visible on the 5-minute chart. However, after the bears reached their target in the area of 1.2298, the pressure on the pound eased, which led to a slight upward correction at the beginning of Asian trading. At the moment, much will depend on how buyers behave in the resistance area of 1.2350, since a break and consolidation above this range will allow for a larger upward correction to the area of a high of 1.2417, and then for an update of resistance 1.2476, where I recommend taking profit. In case GBP/USD declines after the release of weak data on the state of the UK services sector, forming a false breakout in the support area of 1.2298 will be the first signal to open long positions. In the absence of activity at this level, it is best to postpone purchases until a low of 1.2245 has been put to a test, or open long positions immediately to rebound from a low of 1.2173.
To open short positions on GBP/USD you need:
Bears will seek to form a false breakout in the resistance area of 1.2350, which will be the first signal to open short positions. Weak PMI data, which could be even worse than economists' forecasts, will lead to a breakthrough and consolidation below support 1.2298. This will only raise the pressure on the pair, which will push the pound to the lows of 1.2245 and 1.2173, where I recommend taking profit. In the event of the GBP/USD growth scenario above the resistance of 1.2350 in the morning, it is best to go back to short positions immediately to rebound from a larger high of 1.2417, counting on a correction of 30-40 points within the day.
Signals of indicators:
Moving averages
Trading is below 30 and 50 moving averages, which indicates the preservation of the bearish market.
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
In case the pair grows, the upper border of the indicator in the region of 1.2370 will act as resistance. A break of the lower border at 1.2298 will increase pressure on the pound.
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
