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GBP/USD: plan for the European session on Oct 25, 2019
To open long positions on GBP/USD you need:
The pound fell against the US dollar yesterday, as the bulls rushed to take profits after the major growth observed in the past few weeks. However, the decision of the British prime minister to hold a general election on December 12 supported the GBP/USD pair. This was done in order to put pressure on the EU when deciding on a deadline for the UK exit. Bulls need to return to the resistance of 1.2860 today, which will be a signal to open long positions capable of updating highs of 1.2943 and 1.3012, where I recommend profit taking. If the pressure on the pound remains in the first half of the day, then only the formation of a false breakout near the lower boundary of the current correction channel, as well as the support test of 1.2757 will be a signal to open long positions. Otherwise, it is best to buy GBP/USD for a rebound from a low of 1.2664.
To open short positions on GBP/USD you need:
Bears will continue to rely on the EU’s intransigence on the issue of postponement, as well as on blocking Johnson’s attempt to hold the election on December 12 this year. All this will put pressure on the pound. Therefore, the formation of a false breakout in the resistance area of 1.2860 will be the first signal to open short positions in order to update support in the area of 1.2757, which coincides with the lower boundary of the current correction channel. In case of positive news from the EU, and a breakthrough of resistance at 1.2860, it is best to consider short positions in GBP/USD from larger highs around 1.2943 and 1.3012.
Signals of indicators:
Moving averages
Trading is carried out below 30 and 50 moving average, which indicates a possible continuation of the downward correction.
Bollinger bands
In case the pair falls, a breakthrough of the lower boundary of the indicator in the region of 1.2807 will raise pressure on the pound. Growth will be limited by the upper level of the indicator in the area of 1.2910.
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
