To open long positions on GBP/USD, you need:
The British pound rose against the dollar from the weekly lows that were reached yesterday after the House of Commons of the British Parliament held the outgoing Theresa May today. Already in the second half of the day, her post will be occupied by Boris Johnson, who won the Conservative Party's election the day before. As for purchases, the markets need to ensure the level of 1.2478, which was founded in the first half of the day. A good rebound from it will be a signal to open long positions, however, it will be possible to count on the continuation of the uptrend only after returning and consolidating above the resistance of 1.2506. In this scenario, the bulls will aim for new highs around 1.2534 and 1.2563, where I recommend taking the profit. If there will be no special activity in the support area of 1.2478, then I recommend postponing long positions until the update of the minimum of 1.2429.
To open short positions on GBP/USD, you need:
Bears will try to return to the market, but there will be a lot of envy from the speech of the new Prime Minister of Great Britain. In the case of Boris Johnson's harsh statements on Brexit, traders can begin to quickly get rid of long positions. The main task will be to return to the support level of 1.2478, the consolidation below which will hit the stop orders of buyers and push GBP/USD back into a downward peak. The aim of the sellers will be at least around 1.2429, where I recommend fixing the profit. In the scenario of further growth and the lack of a clear position of the new Prime Minister on the Brexit deal, it is best to count on short positions in the pound after a false breakout near the maximum of 1.2534 or a rebound from the larger local level of 1.2565.
Indicator signals:
Moving Averages
Trading is conducted above 30 and 50 moving averages, however, given the high volatility due to political events, I do not recommend taking the indicator into account.
Bollinger Bands
If the pound falls in the second half of the day, the lower limit of the indicator in the area of 1.2405 will act as support.
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
