Hourly chart of the GBP/USD pair
The technical picture for the GBP/USD pair is starting to get confusing. Sellers seem to have clearly indicated their desire to trade for a fall, however, the price moves down somehow not too willingly. And if the previous high of 1.3107 is updated today, then further downward movement will be questioned. In this case, one can expect either the resumption of the upward trend or flat (sideways movement, as a rule, in a narrow price range). We still hope that sellers will pull themselves together and continue being cautious of selling the pair. However, this will require a new signal for these same sales. In our case, the MACD indicator turns down. You are not recommended to sell the pair without it. At the same time, the upward trend may resume, and in order to try to work with this movement, a signal will also be required, for example, a breakout of some important level.
There was not much news in the UK on Tuesday. Thus, novice traders could trade solely based on technical factors and signals. The index of business activity in Britain's services sector will be released today, but we recommend paying attention to the US report on ADP, which will be released in the afternoon. Exceeding the forecast for it (+1.5 million) could cause the dollar to rise (that is, a fall in the euro/dollar and pound/dollar pairs). We would also like to draw attention to a long term factor that may start to support the US currency. The coronavirus, but not in America, but in the European Union. According to some reports, there are signs of a second wave in Europe. Of course, let's hope that this is not the case, since we are talking about the life and health of people. However, if a new wave of the epidemic begins in Europe, this could put an end to further growth in the euro and pound sterling. So far, there have been only minor spikes in disease in Germany, Spain and Switzerland.
The following scenarios are possible on August 5:
1) A buy signal formed yesterday (the MACD indicator turned up), but we are not very interested in buying right now. We believe that the upward trend is over, and if this is not the case, we recommend buying the pair only if the 1.3123 level is overcome, which is located just above the two previous local highs. But even in this case, we recommend closing purchases around the 1.3178 level.
2) Selling, from our point of view, can be considered after the MACD indicator reverses downward, which may occur somewhere near the upward trend line, which the price successfully crossed yesterday. In this case, we recommend trading the pair down with the target of 1.2996, which makes it possible to earn about 80 points.
What's on the chart:
Support and Resistance Price Levels - Levels that are targets when buying or selling. You can place Take Profit levels near them.
Red lines - channels or trend lines that display the current trend and show which direction it is preferable to trade now.
Arrows up/down - indicate when you reach or overcome which obstacles you should trade up or down.
MACD indicator is a histogram and a signal line, the crossing of which is a signal to enter the market. It is recommended to use in combination with trend lines (channels, trend lines).
Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a 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 price reversal 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.