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GBP/USD: plan for the European session on Sept 6, 2019
To open long positions on GBP/USD you need:
Buyers of the pound expect growth to continue, but it will be extremely difficult to do so after such a major trend that has been observed throughout the week. The problem is still the resistance of 1.2343, and only its break will provide a larger upward trend to the area of highs 1.2387 and 1.2427, where I recommend taking profits. However, it is best to make more rational purchases today after a downward correction to the support area of 1.2281, subject to the formation of a false breakdown there, or to a rebound from a low of 1.2219, which can be updated after a good report on the state of the US labor market is released.
To open short positions on GBP/USD you need:
Bears will be waiting for an update of yesterday’s high and the divergence to form, approximately from the level of 1.2365, which is now being formed on the MACD indicator. Only in this scenario, with a return to a resistance of 1.2343, can we consider short positions in the pound with the support test of 1.2281. A more important task for pound sellers will be to consolidate below 1.2281, since such a scenario will lead to a larger profit consolidation and an update of the low of 1.2219, where I recommend profit taking. If the bullish momentum remains above the resistance of 1.2343, and traders ignore the divergence, then it is best to consider new short positions after updating highs 1.2387 and 1.2427.
Signals of indicators:
Moving averages
Trade is conducted above 30 and 50 moving averages, which indicates that the pound might continue to grow.
Bollinger bands
In case the pound increases, a break of the upper boundary at 1.2270 will lead to a new wave of growth. A break of the lower boundary of the indicator at 1.2313 may strengthen the downward correction.
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
