04.02.202008:00 Forex Analysis & Reviews: GBP/USD: plan for the European session on February 4. Pound returns to critical levels around 1.2990

To open long positions on GBP/USD you need:

Yesterday I wanted to talk so much about the pound's further growth after the UK left the EU and about the breakout of the upper boundary of the medium-term triangle in favor of buyers, today bulls need to think about how to protect themselves from the breakout of the lower boundary in the region of 1.2990, which is the last hope for the pound's recovery in the short term. As long as trading is above 1.2990, we can expect the pair to return to the resistance area at 1.3030, consolidating on which is an equally important task, since it depends on whether the bulls will be able to update highs 1.3065 and 1.3102, or not. In case there is a breakout of support at 1.2990, it is best to return to long positions only after a test of a low of 1.2963, and it is better to look even lower when buying the pound, in the areas of 1.2939 and 1.2896. Today's UK construction data is unlikely to make any significant changes to the market.

To open short positions on GBP/USD you need:

Pound sellers have already returned the pair to the support area of 1.2990 and are now fully focused on the breakout of this level. Consolidation under this range will indicate complete surrender of the bulls that have been gaining long positions in this area since January 20, which will cause the pair to sharply drop to the area of the lows 1.2963 and 1.2939, however, the bears' further target will be the 1.2896 area, where I recommend consolidating profit. In the upward correction scenario, sellers will show themselves after unsuccessful consolidation above the resistance of 1.3030, and if there is no pressure from major players there, it is better to postpone short positions until the test of a high at 1.3065. Considering what movements are now taking place in the British pound, do not forget about the placement of stop orders.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 moving averages, which indicates a gradual change in market sentiment in favor of sellers.

Bollinger bands

In case the pound declines further, support will be provided by the lower boundary of the indicator at 1.2963. Growth will be limited by the upper level of the indicator in the area of 1.3065.

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