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GBP/USD: plan for the European session on July 24, 2019
To open long positions on GBP/USD you need:
Further movement of the pound will depend entirely on what the new British prime minister will be talking about after he officially takes office. Buyers will expect a softer tone in relation to the EU and Brexit, which can support the pound, and a breakthrough and consolidation above the resistance of 1.2454 will be the first signal to open long positions based on updating highs of 1.2495 and 1.2533, where I recommend to take profits. Upon reaching these levels, bears will try to counterattack. If the pressure on GBP/USD continues, and buyers miss support at 1.2419, then in this scenario, it is best to look for new long positions if there is a false breakdown around the intermediate low of 1.2383, but more optimal purchases are seen in areas of 1.2383.
To open short positions on GBP/USD you need:
The pressure on the pound will immediately return as soon as Boris Johnson speaks in a negative tone about Brexit and relations with the EU. Given that he is a supporter of a hard scenario, it will not be entirely correct to wait for soft statements. The breakthrough of support at 1.2419, exactly like the formation of a false breakdown in the resistance area of 1.2454, will increase the pressure on GBP/USD and lead to the continuation of the downward movement, which will head towards lows of 1.2383 and 1.2342, where I recommend to take profit. It should be noted that the test of support at 1.2342 will indicate the pound’s return to the medium-term descending channel. In case there is growth in the pair during the first half of the day, above a resistance of 1.2454, a more appropriate level for opening short positions will be a high of 1.2495.
Indicator signals:
Moving averages
Trade is conducted below 30 and 50 moving averages, which indicates the possible preservation of the downward movement.
Bollinger bands
Pound growth will be limited to the upper boundary of the indicator in the region of 1.2454, from where you can watch sales in the morning.
Description of indicators
- MA (moving average) 50 days – yellow
- MA (moving average) 30 days – green
- MACD: fast EMA 12, slow EMA 26, SMA 9
- Bollinger Bands 20
The material has been provided by InstaForex Company – www.instaforex.com
