To open long positions on GBP/USD you need:
Tensions over the Brexit situation and the suspension of the UK Parliament continue to put pressure on the pound. Buyers made an attempt on Friday to go above the resistance of 1.2200, but failed to do so. At the moment, the task of the bulls is to break the resistance of 1.2188, as well as consolidate higher, which will lead to a larger upward correction to the area of a significant level of 1.2232, where I recommend taking profits. If the bears continue to pull down the pound, I recommend to open long positions only after the formation of a false breakdown in the support area of 1.2143, which on Friday kept the pound from falling, or buy for a rebound immediately from a low of 1.2107. However, the update of 1.2107 will indicate a complete turnaround of the upward trend, so strong growth from this range can hardly be expected.
To open short positions on GBP/USD you need:
The main task of the pound sellers is to break the support of 1.2143, near which all the downward movement stopped on Friday. Only such a scenario will allow counting on updating the lows in the region of 1.2107 and 1.2065, which will completely erase all attempts by pound buyers to return to the market in the near future. The formation of a false breakdown in the resistance area of 1.2188 will also be a good signal to open short positions in GBP/USD, however it is best to sell immediately for a rebound at the high of 1.2232, which is a very important medium-term resistance level.
Signals of indicators:
Trading is below 30 and 50 moving averages, which indicates a possible continuation of the pound’s fall.
In case of pound growth, the upward potential of the indicator will be limited by the upper boundary of the indicator at 1.2195. A bearish impulse can be stopped by the lower boundary at 1.2135.
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