To open long positions on GBPUSD, you need:
Data on services and manufacturing in the UK were much better than economists ‘ forecasts, which returned demand for the British pound and allowed buyers to attempt to consolidate above the resistance of 1.2222, where trade is currently conducted. If you look at the 5-minute chart, you will see how the bulls are actively fighting now for the support of 1.2222, and as long as the trade is conducted above this range, you can expect the continuation of the upward trend in the pound, formed at the beginning of this week. The nearest target of the bulls is a maximum of 1.2882, the third test of which can lead to a breakdown and a larger upward trend to the area of 1.2336 and 1.2370 levels, where I recommend fixing the profits. In the scenario of a return of GBP/USD to the area of 1.2222, the market will again return to the side of sellers. In this case, it is best to postpone long positions until the support update of 1.2173, where the bears did not reach today or buy GBP/USD immediately on the rebound from the minimum of 1.2122, where the upper border of the new ascending channel will pass.
To open short positions on GBPUSD, you need:
In the second half of the day, good data on the US PMI indices are expected, which may allow sellers of the pound to return to the level of 1.2222. This should be done as quickly as possible. Only fixing below this range will increase the pressure on the pair, which will lead to an update of the minimum of 1.2173, and quite possibly to a test of large support of 1.2122, where I recommend fixing the profits since there the bulls will try to form the lower border of a new ascending channel. An equally important task remains the protection of the resistance of 1.2282, where only the next formation of a false breakdown will be a signal to open short positions. With growth above this range, it is best to abandon sales to the large resistance test of 1.2336 or to rebound from a maximum of 1.2370.
Signals of indicators:
Trading is conducted around the 30 and 50 daily averages, which indicates market uncertainty, but before the breakdown of the average, the market will be on the side of sellers of the pound.
Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.
A break in the upper limit of the indicator around 1.2245 will lead to a larger increase in the pound. If the pair declines, the lower border of the indicator around 1.2185 will provide support.
Description of indicators
- Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
- Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
- MACD indicator (Moving Average Convergence / Divergence – moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
- Bollinger Bands (Bollinger Bands). Period 20
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Performed by Ruben Watson,
InstaForex Group © 2007-2020
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