To open long positions on GBP/USD, you need:

Almost half of Friday's growth of the pound is already blocked by a downward correction. However, it is too early for buyers to worry. On the contrary, if we take a large two-day growth of the pair, the first real support is now seen in the area of 1.2530, just below which there is another good level of 1.2480, from where you can open long positions immediately on the rebound. Another task for the bulls will be the return of GBP/USD to the resistance of 1.2585, consolidation above which can lead to stronger demand and further growth of the pair to the highs of 1.2639 and 1.2673, where I recommend taking the profits. However, given that today is Columbus Day in the US and many markets are closed, volatility is unlikely to be high.

To open short positions on GBP/USD, you need:

I do not recommend selling the pound at current levels. The optimal scenario will be a re-return and update of resistance in the area of 1.2639 and 1.2673, where you can see the first short positions. However, the more important task of the bears will be to break the support of 1.2530 and close the day below this level, which should push the pair to a minimum of 1.2480, where I recommend taking the profits. Any positive news related to Brexit will immediately bring back new buyers of the pound, so do not forget about stop orders in such a volatile market.

Indicator signals:

Moving Averages

Trading is conducted around the 30 and 50 daily averages, which indicates the possible completion of a downward correction in the pound.

Bollinger Bands

The pound is supported by the lower border of the indicator in the area of 1.2520, but the growth in the second half of the day will be limited to the average level in the area of 1.2590.

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