To open long positions on GBP/USD you need:
The pound's decline after the failure of all the prepositional Brexit scenarios led to a test of large support levels. As long as buyers keep the pair above 1.3162, the demand for the pound will remain, but the main task will be the breakdown and consolidation above the resistance of 1.3212, which will lead to an update of the upper limit of the side channel of 1.3261, where I recommend to take profit. In case the pound further drops on uncertainty with Brexit, long positions can be seen after the test of lows of 1.3122 and 1.3083. Otherwise, it is best to buy on a rebound from a support of 1.3004.
To open short positions on GBP/USD you need:
Bears need to make a false breakdown in the area of resistance at 1.3212, and the main task will be to return and consolidate below the support of 1.3162, which will increase the pressure on the pair and lead to a test of lows around 1.3122 and 1.3083, where I recommend taking profits. In the absence of sellers in the middle of the channel at 1.3212, it is best to return to short positions to rebound from its upper border of 1.3261. Any Brexit news could lead to a significant surge in market volatility.
Indicator signals:
Moving averages
Trade is conducted in the area of 30-day and 50-moving averages, which indicates the formation of a side channel.
Bollinger bands
In case the pound decreases, the lower limit of the Bollinger Bands indicator around 1.3135 will provide support. Growth will be limited by the upper boundary of the indicator in the area of 1.3261.
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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