For long positions on GBP/USD :
Yesterday , the bears tried to break below the support level of 1.2315. Today in the early trade, the bulls did the same for the British pound, getting close to the resistance level of 1.2487, but still failed to break through it. Now the price is moving back to the middle of the channel, and it is not recommended to take any actions from there. As long as the pair is above the level of 1.2315, we can expect continuous growth of the GBP/USD pair to the resistance level of 1.2487. If the pair breaks through this level, it can then rise to as high as 1.2605 and 1.2686 where I recommend taking profit. In case the pound faces a downward correction to the level of 1.2315, there is no need to rush with opening long positions. Only a false breakdown may signal further purchases. However, it is better to wait until the price tests the 1.2150 support level. Otherwise, you can open long positions immediately after the price rebounds from a low of 1.1985. In the afternoon, important reports are due to be released on the state of the US economy. In particular, the data on the labor market will be issued which could negatively affect the pound/dollar pair. Downbeat economic data from the US can urge traders to buy the dollar as a safe-haven asset in the face of an impending crisis. In this scenario, GBP/USD is likely to retreat.
For short positions on GBP/USD:
The bears started to act as the pair approached the resistance level of 1.2487. However, they failed to wait until a false breakdown forms there, which would be a clear signal to open short positions. In the afternoon, the bears will not allow the bulls to renew this week's highs, which will further increase the tension in the market. The bears will also try to regain control over the market. For this, the price should hold below the support level at 1.2315. At the North American session, the price can finally break through this level, after five attempts, what will lead to a larger sell-off of the GBP/USD pair and will push the pair to the low of 1.2150 and 1.1985. I recommend taking profit at this point. In case the pair test the level of support at 1.1985, this will indicate the resumption of the bearish trend. If the bulls attempt to regain ground and form an uptrend, only the formation of a false breakdown at the resistance level of 1.2487 will be a good signal for opening short positions. Otherwise, it is better to open short positions on the pound when it rebounds from tits highs at 1.2605 and 1.2686.
More details can be found in the video review.
Indicator signals:
Moving averages
The deals are opened in the range between 30 and 50 of the daily averages, which indicates the uncertainty in the market, but shows that bulls are still gaining ground.
Note: The period and prices of moving averages are considered by the author according to the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.
Bollinger Bands
Testing of the upper border of the indicator at 1.2440 gives hope that the pound will continue to grow in the short term. The lower border of the indicator is at 1.2350 which still serves as a support level.
Description of indicators
Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. On the chart is marked with yellow. Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. On the chart is marked with green. MACD indicator (Moving Average Convergence/Divergence - Moving Average Convergence/Divergence). Fast EMA 12 days. Slow EMA 26 days. SMA - 9. Bollinger Bands. Period 20.
