GBP/USD: trading plan for the US session on May 21st (analysis of morning deals). Buyers target the 1.2722 level

In my morning forecast, I paid attention to the 1.2720 level and planned to make decisions on entering the market based on it. Let's look at the 5-minute chart and figure out what happened there. Growth and the formation of a false breakdown there gave a sell signal. However, as you can see on the chart, it has yet to reach a major downward movement, although the chances of this are quite good. From a technical point of view, I did not change anything.

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

The lack of data on the UK has kept the market on the side of buyers of the pound, who are now trying their best to get above 1.2722. There is a lack of a normal reason, which may be the planned speech by the Governor of the Bank of England, Andrew Bailey. I talked about him in more detail in the morning forecast, so we will not dwell on this. In addition, speeches by representatives of the Federal Reserve System in the person of Christopher Waller, Rafael Bostic, who advocates a softer policy, and FOMC member John Williams are expected. The aggressive tone of politicians will harm the upward potential of the pound, and the market's preparation for a rate cut will allow GBP/USD to continue to grow. In case of a negative reaction, only the formation of a false breakdown in the morning support area of 1.2697 will give an entry point into long positions that can bring the pound back to 1.2722 – a weekly maximum, above which it has not yet been possible to break through in the morning. A rush and a top-down test of this range will determine the chance of GBP/USD growth with the 1.2763 update. In the case of an exit above this range, we can talk about a breakthrough to 1.2800, where I'm going to fix profits. In the scenario of GBP/USD falling and no buyers at 1.2697 in the afternoon, the pressure on the pound will increase, which will lead to a downward movement towards the lower boundary of the 1.2672 side channel. The formation of a false breakdown will be a suitable option for entering the market. It is possible to open long positions on GBP/USD immediately on a rebound from 1.2646 in order to correct 30-35 points within a day.

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

In case of a bullish reaction to the speech of representatives of the Federal Reserve System, I'm going to act around the weekly high of 1.2722, from where the pound fell once yesterday. The formation of a false breakdown there, by analogy with yesterday, will lead to an excellent entry point into short positions in order to reduce GBP/USD to the support area of 1.2697, where the moving averages playing on the side of the bulls are located. A breakout and a reverse test from the bottom up of this range will increase the pressure on the pair, giving the bears an advantage and another entry point to sell with the aim of updating 1.2672, where I expect a more active manifestation of buyers. A longer-range target will be a minimum of 1.2646, which will negate all the efforts of the bulls last week. I will fix the profit there. With the option of GBP/USD growth and the absence of bears at 1.2722 in the afternoon, and so far everything is going to this, buyers will have the opportunity to build a bull market further and update the level of 1.2763. I will also serve there only on a false breakdown. In the absence of activity there, I advise you to open short positions on GBP/USD from 1.2800, counting on the pair's rebound down by 30-35 points within the day.

Indicator Signals:

Moving Averages

Trading is conducted above the 30 and 50-day moving averages, indicating further pound growth.

Note: The period and prices of the moving averages considered by the author are on the hourly H1 chart and differ from the general definition of classic daily moving averages on the D1 daily chart.

Bollinger Bands

In case of a decline, the lower boundary of the indicator, around 1.2697, will act as support.

Indicator Descriptions: