FX.co ★ GBP/USD: plan for the European session on January 31. The pound remains in the side channel and awaits news from Theresa May

To open long positions on GBP/USD you need:

Buyers of the British pound could resume an uptrend, but this will require a breakdown of resistance at 1.3135. Only after this will prospects open for updating the highs in the region of 1.3214 and 1.3260, where I recommend taking profits. However, a larger upward movement will depend on negotiations between British Prime Minister Theresa May and EU representatives. In case of a downward correction of the purchase for the pound, I recommend doing it only on the condition of a false breakdown in the area of 1.3053 or on a rebound from 1.2971.

To open short positions on GBP/USD you need:

An unsuccessful consolidation above the resistance of 1.3135 will be the first signal to sell the British pound, however, the main goal of the sellers will be a breakthrough of the support at 1.3053, which may lead to a further drop in GBP/USD with the exit to the lows of 1.2971 and 1.2894, where I recommend to fix the profit. In case the pound increases above 1.3135, it's best to take a closer look at short positions after updating the month highs around 1.3260 and 1.3348. Any news of the failure of negotiations between May and EU representatives could lead to a rapid fall in the pound.

Indicator signals:

Moving averages

Trade is conducted in the area of 30-day and 50-day moving, which indicates the formation of the lateral nature of the market.

Bollinger bands

Volatility is low, which does not give signals for entering the market using the Bollinger Bands indicator.

Description of indicators

• MA (moving average) 50 days - yellow
• MA (moving average) 30 days - green
• MACD: fast EMA 12, slow EMA 26, SMA 9
• Bollinger Bands 20