GBP/USD

GBP/USD: the pound strengthens

Current trend, December 24, GBP rose, renewing local highs since December 10. There were no clear reasons for the growth of the pound at the beginning of the week since many investors chose to stay out of the market during the Christmas holidays.

Brexit problems temporarily faded: Prime Minister Theresa May and Conservative leader Jeremy Corbyn did not mention it in their holiday messages. The main struggle for a deal with the EU will unfold after the holidays: a second vote in the House of Commons upon the agreement with EU should take place on January 14.

Support and resistance

On the daily chart, Bollinger bands are reversing into a horizontal plane. The price range is actively narrowing, reflecting the ambiguous nature of trading in the short/medium term. MACD indicator is growing, keeping a strong buy signal (the histogram is above the signal line). Stochastic is directed upwards but is in close proximity to its highs, which reflects that GBP can become overbought in the short and/or super short term.

It is better to keep current long positions in the nearest future and be extremely cautious while opening new positions in the current "thin" market.

Resistance levels: 1.2722, 1.2763, 1.2793, 1.2838.

Support levels: 1.2670, 1.2633, 1.2600, 1.2574.

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Trading tips

Long positions can be opened after the breakout of the levels of 1.2722–1.2730 with the target at 1.2800 or 1.2838. Stop loss is 1.2700. Implementation period: 1–2 days.

Short positions can be opened after the breakdown of the level of 1.2633 with the targets at 1.2574–1.2550 or 1.2533. Stop loss is 1.2670. Implementation period: 2–3 days.

 

Scenario

Timeframe Intraday
Recommendation BUY STOP
Entry Point 1.2727, 1.2735
Take Profit 1.2800, 1.2838
Stop Loss 1.2700
Key Levels 1.2574, 1.2600, 1.2633, 1.2670, 1.2722, 1.2763, 1.2793, 1.2838

 

Alternative scenario

 

Recommendation SELL STOP
Entry Point 1.2625
Take Profit 1.2574, 1.2550, 1.2533
Stop Loss 1.2670
Key Levels 1.2574, 1.2600, 1.2633, 1.2670, 1.2722, 1.2763, 1.2793, 1.2838

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