GBP/USD: plan for the European session on Dec 16, 2019

To open long positions on GBPUSD, you need:

The victory of the Conservative Party of the United Kingdom in the elections and its majority in parliament, although it gave clarity, however, the uncertainty over which scenario the situation with Brexit will develop further forces pound buyers to take profits. The levels that I paid attention to on Friday, subject to a downward correction, have fully worked out and now the main task of the bulls is to consolidate above the area of 1.3378, which will allow the GBP/USD to continue growing in the short term. However, the return to the highs in the area of 1.3450 and 1.3523 will depend entirely on what will be the report on the UK services sector, which has recently been experiencing bad times. If you return to the support of 1.1.3378 in the first half of the day, you can return to long positions after the test of the minimum of 1.3316, provided that a false breakout is formed there, or buying the pound immediately on the rebound from the larger supports of 1.3265 and 1.3218.

To open short positions on GBPUSD, you need:

Bears will try to maintain the current downward momentum, however, to open short positions, it is best to wait for the release of the report on the UK services sector with the formation of a false breakout in the resistance area of 1.3450. A decline below the support level of 1.3378 in the first half of the day may also force buyers to retreat from the market, which will push GBP/USD back to the support area of 1.3316, the breakdown of which will provide a larger downward wave to the lows of 1.3265 and 1.3218, where I recommend taking the profits. In the scenario of growth of the pound above 1.3450 after the data on the services sector, it is best to look at short positions when updating the highs of 1.3523 and 1.3563.

Indicator signals:

Moving Averages

Trading is conducted above 30 and 50 moving averages, which indicates further growth of the pound.

Bollinger Bands

If the pound falls, the lower border of the indicator around 1.3316 will provide support. A break above the upper level of the indicator around 1.3410 will lead to a new wave of growth of the pound.

Description of indicators

• Moving average (moving average determines the current trend by smoothing volatility and noise). Period 50. The chart is marked in yellow.
• Moving average (moving average determines the current trend by smoothing volatility and noise). Period 30. The chart is marked in green.
• MACD indicator (Moving Average Convergence / Divergence – convergence / divergence of moving averages) – EMA Period 12. Slow EMA Period 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20

The material has been provided by InstaForex Company – www.instaforex.com

Source:: GBP/USD: plan for the European session on December 16. The electoral euphoria is over