Sep 14, 2020, 9:08:27 AM

GBP/USD: trading in both directions

Current trend

GBP is marginally strengthening against USD in the trading of today's morning session, retreating from the local lows since July 24, updated at the end of last week. The growth of GBP is technical in nature, while the pair continues to remain under the pressure of sharply increased risks associated with the hard Brexit. Markets are still trying to figure out what Boris Johnson is trying to achieve, having stepped up criticism of the EU recently.

Last week the British government passed a bill that could allow the UK to actually violate international law on the issue of trade with Northern Ireland. It is possible that these are only political machinations, which are designed to bargain with the EU for the best terms of the deal, but so far Johnson's position looks quite plausible.

Support and resistance

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range narrows slightly from below, reflecting the decline in activity over the past few days. MACD indicator is growing preserving a fairly weak buy signal (located above the signal line). Stochastic, having approached the level of "80" is reversing into a downward plane, signaling the risks of corrective decline in the ultra-short term.

To open new trading positions, it is necessary to wait for the signals from technical indicators to be clarified.

Resistance levels: 1.2850, 1.2900, 1.2950, 1.3000.

Support levels: 1.2761, 1.2700, 1.2600.

Trading tips

To open long positions, one can rely on the rebound from the support level of 1.2761 with the subsequent breakout of 1.2850. Take-profit – 1.2950. Stop-loss – 1.2790.

The return of "bearish" trend with the breakdown of 1.2761 may become a signal for further sales with the target at 1.2600. Stop-loss – 1.2850.

Implementation time: 2-3 days.