GBP/USD: pound is recovering

Current trend. Today, GBP is moderately rising against USD, partially recovering from Friday’s strong decline.

Investors are focused on Brexit situation. On Friday, a number of ministers, including the Minister of the Environment, Michael Gove, and the Minister of International Trade, Liam Fox, said they would stay in the government and continue working on the deal. The current situation weakens May’s position before the battle in parliament, which now has to ratify the draft treaty with the EU. If the Prime Minister fails to convince the deputies, this will entail not only a “tight” exit from the EU but also an internal political crisis. The Labor Party has already said that if the deal cannot be concluded, they will insist on a new general election and, possibly, on another referendum.

Today the instrument trades ambiguously. GBP is under pressure of Rightmove housing prices. In November, the indicator decreased by 0.2% MoM and 1.7% YoY after rising by 0.9% MoM and 1.0% YoY in October.

Support and resistance

On the daily chart, Bollinger bands reverse horizontally. The price range is actively narrowing, reflecting the ambiguous trade nature. MACD is falling, keeping a strong sell signal (the histogram is below the signal line). Stochastic is reversing downwards after a brief growth, reflecting that GBP is oversold in the super-short term.

It is necessary to wait for clarification of the trading signals.

Resistance levels: 1.2876, 1.2920, 1.2950, ​​1.3000.

Support Levels: 1.2776, 1.2722, 1.2693, 1.2659.


Trading tips

Long positions can be opened after the breakout of 1.2876 with the target at 1.3000. Stop loss is 1.2830.

Short positions can be opened after the breakdown of 1.2776 with the target at 1.2693 or 1.2659. Stop loss is 1.2820–1.2830.

Implementation period: 2–3 days.



Timeframe Intraday
Recommendation BUY STOP
Entry Point 1.2880
Take Profit 1.3000
Stop Loss 1.2830
Key Levels 1.2659, 1.2693, 1.2722, 1.2776, 1.2876, 1.2920, 1.2950, 1.3000


Alternative scenario


Recommendation SELL STOP
Entry Point 1.2770
Take Profit 1.2693, 1.2659
Stop Loss 1.2820, 1.2830
Key Levels 1.2659, 1.2693, 1.2722, 1.2776, 1.2876, 1.2920, 1.2950, 1.3000

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