06.05.202006:48 Forex Analysis & Reviews: GBP/USD: plan for the European session on May 6. Sellers urgently need to return to the market, otherwise buyers will take control. Bears aim for 1.2424

To open long positions on GBP/USD, you need:

After several unsuccessful attempts to break below the support of 1.2424, the sellers of the pound retreated, forming a large resistance of 1.2478, which they continue to protect now. Buyers of the pound currently need another false breakout to form in the support area of 1.2424, after which you can count on a larger upward correction and a test of the high of 1.2478, where I recommend taking profits. However, it will be possible to talk about continuing the upward trend only after updating yesterday's high. Consolidating above the resistance of 1.2478 will only strengthen the position of the bulls, which will open a direct road to the levels of 1.2517 and 1.2557. Today there is a report on activity in the construction sector in the UK which will not have a serious impact on the pound. Therefore, if the pressure on GBP/USD persists in the first half of the day, and the bulls miss the support of 1.2424, it will be possible to return to long positions only after the test of 1.2391, provided that a false breakout forms there, or buy the pair immediately on the rebound from the low of 1.2360.

To open short positions on GBP/USD, you need:

Pound sellers need to break through and consolidate below 1.2424 support, since this scenario will maintain the bearish momentum in the market, which can push GBP/USD to the lows of 1.2391 and 1.2360, where I recommend taking profit. Weak UK construction data could help. An unsuccessful attempt to push the pound above resistance 1.2478 will be a signal to open short positions. The lack of activity in this range on the part of sellers, as well as the lack of a quick movement of the pair down, can lead to further growth and a larger upward correction to form to the highs of 1.2517 and 1.2557, where I recommend opening short positions immediately for a rebound while expecting a downward movement of 30-40 points within a day. However, be careful, as a break of resistance 1.2478 and updating yesterday's highs will be a verdict for pound sellers, as the short-term downward trend in the pair will be broken.

Signals of indicators:

Moving averages

Trading is below 30 and 50 moving averages, which indicates the formation of a bearish momentum.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger bands

If the pound rises in the first half of the day, the average indicator border at 1.2460 will act as resistance. A break of the lower border of the indicator in the region of 1.2424 will increase the pressure on the pair.

Description of indicators

• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
• MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20