06.07.202006:29 Forex Analysis & Reviews: GBP/USD: plan for the European session on July 6 (analysis of yesterday's trade). Pound buyers defended support at 1.2451 and are moving slowly to last week's high

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

Pound buyers managed to defend support 1.2451 amid weak volatility and low trading volume, which preserves the prerequisites for the pair's further growth in the short term. News of another failed round of talks between London and Brussels did not significantly affect the pound's quotes. While trading is conducted above the area of 1.2451 at the moment, we can expect the pound to continue growing to the high of 1.2528, consolidating above which will necessarily lead the pair to a new resistance area of 1.2607, where I recommend taking profits. In case GBP/USD falls in the first half of the day, forming a false breakout at the level of 1.2451 will be a signal to open long positions. This could happen after the release of good reports on activity in the construction sector in the UK, which is gradually reviving after the coronavirus pandemic. If there is no activity from the bulls in this range, it is best to postpone purchases until the update of the larger area at 1.2386, from which the bulls will try to build the lower border of the new ascending channel.

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

Sellers of the pound will definitely show activity in the resistance area of 1.2528, which they managed to protect last Thursday, forming a fairly good sell signal from there. The bears need to consolidate below the level of 1.2451 at the moment, which will be a signal to open short positions in the expectation of resuming the downward correction to the area of the low of 1.2386, where I recommend taking profits. In case GBP/USD grows further, it is best to postpone sales until a false breakout forms at the level of 1.2528. But you can safely open short positions immediately for a rebound only after testing the high of 1.2607, counting on a correction of 30-40 points within the day.

Indicator signals:

Moving averages

Trading is conducted in the area of 30 and 50 moving averages, which indicates the uncertainty of traders with a further Outlook.

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.

Bollinger Bands

The downward movement will only continue after the breakout of the lower border of the indicator in the area of 1.2451. Growth above the upper limit of the indicator in the area of 1.2492 will lead to a new upward wave of the pound.

Description of indicators

• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
• MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Fast EMA period 12. Slow EMA period to 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-commercial traders are speculators, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
• Long non-commercial positions represent the total long open position of non-commercial traders.
• Short non-commercial positions represent the total short open position of non-commercial traders.
• The total non-commercial net position is the difference between short and long positions of non-commercial traders.