21.05.202006:54 Forex Analysis & Reviews: GBP/USD: plan for the European session on May 21 (analysis of yesterday's trade). Pressure on the British pound is gradually returning. Bears regained control over 1.2222

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

Yesterday afternoon, I advised you to open short positions on the pound after the resistance update of 1.2282, which happened. If you look at the 5-minute chart, you will see how, after a test of this resistance, activity began to slow down, and the speech of Bank of England Governor Andrew Bailey returned pressure to the British pound, which quickly collapsed by the end of the US session in the 1.2222 support area. The breakdown of this range in the Asian session returns market control over to the bears, therefore, growth in this area is so important today in the morning. Consolidating at 1.2222 and testing it from top to bottom will be a signal to buy the pound while expecting a return to this week's high at 1.2282, where I recommend taking profits. If pressure on the pair returns after reports on the services and production sectors, it is best to postpone long positions until the test of a low of 1.2173, and then subject to forming a false breakout there, or buy GBP/USD for a rebound from a low of 1.2122 per 30 correction -40 points. There will also be the lower border of the new rising channel in the British pound.

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

Sellers need to keep the pair below resistance 1.2222 for as long as possible, and the forming a false breakout there in the morning after the release of reports on the UK PMI composite index will be a good sell signal to break through and consolidate below support 1.2173, which will only raise the pressure on the pound and will result in an update of a larger low of 1.2122, where I recommend taking profits. With a growth scenario above 1.2222, it is best not to rush into selling and wait for a test of the high of 1.2282. You can open short positions from there immediately on the rebound, counting on a correction of 30-35 points within the day.

Signals of indicators:

Moving averages

Trading is below 30 and 50 moving averages, indicating a return of pressure on the British pound.

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

In case of growth of GBP/USD, the average border of the indicator in the area of 1.2245 will act as resistance, and you can sell immediately for a rebound after the test of the upper border in the region of 1.2282.

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