27.02.202007:17 Forex Analysis & Reviews: GBP/USD: plan for the European session on February 27. Upward trend is broken. Pound risks returning to month lows at 1.2850

To open long positions on GBP/USD you need:

The British pound continues to play on the nerves of investors and, as I noted in yesterday's review, behaves exactly the same as during the uncertainty with Brexit. The importance of trade negotiations between the EU and the UK is causing a surge in market volatility. At the moment, the task of the bulls is to break and consolidate above the resistance of 1.2930, which will lead to a larger growth of GBP/USD in the region of the high of 1.2970, but for this it is necessary to cope with the moving averages. With larger growth, the bulls will try to return the pair to a high of 1.3006. In case the pound falls further, which might occur after the speech of the head of the Bank of England Mark Carney, it is best to open long positions only after a false breakout has formed in the support area of 1.2889, and I recommend buying the pound for a rebound only from the low of this month at 1.2851, and then with the condition for a rebound no more than 25-30 points.

To open short positions on GBP/USD you need:

Pound sellers control the market, so they will wait for more suitable prices. The formation of a false breakout at the level of 1.2930, with a rebound from the moving average will be a signal to open short positions in the pound, which will lead to its decline and update support at 1.2889. In the absence of active sales after forming this setup, it is better to open short positions in GBP/USD only by a rebound from a high of 1.2970. A more important task for the bears is to break through and consolidate below the support of 1.2889, which will quickly push the pair to the year lows at 1.2851, and will lead to their renewal in the areas of 1.2830 and 1.2799, where I recommend taking profits. However, the reaction to the statements of the Governor of the Bank of England can be unpredictable, since any statements related to interest rates will lead to a surge in market volatility and can dramatically change investor sentiment.

Signals of indicators:

Moving averages

Trading is carried out below 30 and 50 moving average, which saves the likelihood of continued downward correction. The averages also play the role of resistance.

Bollinger bands

In case the pair falls, support will be provided by the lower boundary of the indicator in the region of 1.2889. A break of the upper boundary of the indicator in the area of 1.2945 will lead to a new wave of pound growth.

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