To open long positions on GBPUSD, you need:
Data on UK GDP for the 4th quarter of 2019 did not lead to a significant change in the market situation as it fully coincided with the forecasts of economists. The economy did not show any growth, which further complicates the situation in the 1st quarter of this year. Bears tried to break below the support of 1.2315, which is clearly visible on the 5-minute chart, but support from major players, as it was in the Asian session, was not received again, which only strengthened the position of buyers. At the moment, while trading is conducted above the area of 1.2315, we can expect continued growth of GBP/USD in the resistance area of 1.2487, the breakout of which will provide a direct path to the highs of 1.2605 and 1.2686, where I recommend fixing the profits. In the scenario of a correction of the pound to the level of 1.2315, you do not need to rush to open long positions. It is best to wait for the support test of 1.2150 or buy immediately for a rebound from the minimum of 1.1985.
To open short positions on GBPUSD, you need:
Sellers of the pound need to try to return the market under their control and to do this, it is necessary to consolidate below the support of 1.2315. The second attempt to do this at the European session was again unsuccessful. The 5-minute chart clearly shows how the bulls managed to form a false breakout at this level, which I paid attention to in my morning forecast. Only a break in the area of 1.2315 will lead to a larger sale of GBP/USD to the area of the lows of 1.2150 and 1.1985, where I recommend fixing the profits. The support test of 1.1985 will also indicate the resumption of the bear market. In the scenario of an attempt by the bulls to regain the upward trend, only the formation of a false breakout in the resistance area of 1.2487 will act as the first signal to open short positions. Otherwise, it is best to sell the pound on a rebound from the highs of 1.2605 and 1.2686.
Signals of indicators:
Trading is conducted in the area of 30 and 50 daily averages, which indicates the uncertainty of the market with further direction but retains the advantage on the side of buyers.
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 lower border of the indicator around 1.2300 will increase the pressure on the pound and lead to its larger decline. Growth may be limited by the upper level of the indicator around 1.2415.
Description of indicators