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Hourly chart of the GBP/USD pair.
For the GBP/USD currency pair, the technical picture remains more clear and unambiguous. There is an upward trend line that continues to support traders who are trading higher. There was no attempt to go below this trend line, and all corrections of the pair occur above it. On Friday, one of these corrections began. The MACD indicator turned down (shown in the illustration with a red circle), which served as a signal to move down. We do not recommend that novice traders open trades against the trend. Thus, it will be possible to sell the pair no earlier than breaking the trend line, which will be a signal to change the trend to a downward one. At the same time, you need to wait for the completion of the current correction and the resumption of upward movement, which can again be worked out.
On Friday, as throughout the past week, there was not a single important macroeconomic report in the UK. Thus, novice traders could only analyze information coming from America. On Friday, there was also little such information. Reports on personal income and spending of Americans are not important reports, as is the report from the University of Michigan on consumer confidence, and in the current situation, when markets often do not pay attention to statistics at all, there was no chance of being worked out. In general, so far, the markets continue to get rid of the dollar on the basis of the epidemiological crisis in America, which may further worsen the economic crisis (-33% of GDP in the second quarter), slow down the economic recovery in the third and fourth quarters. In addition, we would like to draw the attention of novice traders to the fact that mass riots in many cities continue in the United States, as well as there is a serious political crisis caused by the desire of Donald Trump (US President) to be elected for a second consecutive term and an unwillingness to pay attention to more important, national issues. Thus, despite the reversal of the EUR/USD pair down, the pound continues to have an upward trend. Therefore, we continue to consider trading for an increase.
On August 3, the following scenarios are possible:
1) If today during the day the MACD indicator gives a new buy signal (and this may happen in the next few hours), we will recommend buying the pound/dollar pair again with the nearest targets at the levels of 1.3143 and 1.3206. When this signal is generated, the price should be located strictly above the trend line.
2) HOwever, sales, from our point of view, can be considered only after fixing the price below the trend line. In this case, the trend will change to a downward trend and the initiative will go to the sellers. The targets for sales will be the support levels of 1.3008 and 1.2945. The correction against the upward trend is currently continuing, so in general, we can not completely exclude the option of a further fall in the price. On Monday, important events are not included in the US and UK news calendar.
We also recommend that you familiarize yourself with the analysis, trading signals and analysis of transactions for the EUR/USD pair.
What's on the chart:
Price levels of support and resistance – levels that are targets when opening purchases or sales. You can place Take Profit levels near them.
Red lines – channels or trend lines that display the current trend and indicate which direction it is preferable to trade now.
Up/down arrows – show when you reach or overcome which obstacles you should trade up or down.
MACD indicator – a histogram and a signal line, the intersection of which is a signal to enter the market. It is recommended to use it in combination with trend lines (channels, trend lines).
Important speeches and reports (always contained in the news calendar) can greatly influence the movement of the currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp reversal of the price against the previous movement.
Beginners in the Forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.
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