To open long positions on GBP/USD you need:
Investor sentiment has deteriorated sharply, and expectations of a break in relations with the EU without an agreement have risen substantially after the appearance of the new British Prime Minister Boris Johnson as early Parliamentary elections might be held. Currently, buyers could only hope that the pair will drop in the support area of 1.2115, but only the formation of a false breakdown there will be the first signal to open long positions based on the upward correction in the resistance area of 1.2171. The task of the bulls will be a breakthrough and consolidation above this level, which will increase the demand for the pound and lead to larger areas 1.2218 and 1.2264, where I recommend taking profits. If the pressure on GBP/USD continues further, then it’s best to look for long positions after updating the lows of 1.2040 and rebound from 1.1985.
To open short positions on GBP/USD you need:
Pound sellers are more than satisfied with what is happening, and it’s still very early to talk about the end of the trend. An unsuccessful consolidation above the resistance of 1.2171 with the formation of a false breakout there will lead to a new bearish impulse to the area of a low of 1.2115, and its breakdown will only increase the pressure on the pair and open a direct road to the support area of 1.2040 and 1.1985, where I recommend to take profit. Any official statements indicating a softer approach by the new British prime minister regarding the topic of early elections could lead to a sharp increase in the pound. In this scenario, it is best to open short positions after updating the high of 1.2218, or to rebound from a larger resistance of 1.2264.
Trading is below 30 and 50 moving averages, which indicates the prevalence of pound sellers in the market.
The pair may be supported by a lower limit around 1.2115, while the upward correction will be limited to the average indicator limit around 1.2195, from which you can sell the pound immediately to rebound.
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
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