The UK manufacturing index in June this year remained unchanged and fully coincided with the forecasts of economists, however, this did not prevent buyers of the pound in the first half of the day to attempt to break through the resistance of 1.2386, which I drew attention to in my review. If you look at the 5-minute chart, you will see how the bulls achieve a breakout of the level of 1.2386 and even test it from the top-down, forming a signal to buy the pound. However, the growth was only by 30-35 points, after which the enthusiasm subsided, which led to a return to the area of 1.2386, which reduces the prospects of buyers to continue the upward correction. The main task of the bulls for the second half of the day will be to protect this range and only the next formation of a false breakout there will be a signal to buy in the hope of continuing the growth of GBP/USD to the maximum of 1.2451 and updating the larger resistance of 1.2528, where I recommend fixing the profits. If there is no activity from the bulls around 1.2386, the pressure on the pound may increase. Therefore, when the pair declines, it is best to wait for the formation of a false breakout in the support area of 1.2221 and buy from there. Moreover, there are also moving averages. I recommend making long positions immediately on the rebound only from the weekly lows in the area of 1.2256 in the expectation of correction of 30-40 points by the end of the day.
To open short positions on GBPUSD, you need:
Sellers of the pound tried to form a false breakout from the level of 1.2386 in the first half of the day, however, it did not work out very well. A repeated return to the range of 1.2386 from the bottom up, to form an entry point, ended with a breakdown on the 5-minute chart, which crossed out the bears' plans for a rapid decline in the pound in the first half of the day. At the moment, the bears need to return GBP/USD under the support of 1.2386, fixing below which will be a good signal to open short positions in the expectation of a return to the level of 1.2221. However, only the movement of the pair below this range will return bearish momentum to the market, which will lead to an update and a breakdown of the week's low of 1.2256, which opens a direct road to the area of 1.185, where I recommend fixing the profits. If the bulls continue to push the GBP/USD up, it is best to count on short positions after updating the maximum of 1.2451 or sell the pound immediately on a rebound from the resistance of 1.2528 in the calculation of correction of 30-40 points within the day.
Signals of indicators:
Trading is conducted above the 30 and 50 daily averages, which leaves a chance of continuing the upward correction 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 lower border of the indicator in the area of 1.2365 should increase pressure on the British pound. Breaking the upper limit of the indicator around 1.2420 will lead to the new growth of the pound/dollar pair.
Description of indicators
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