FX.co ★ How to trade GBP/USD on August 2? Simple tips for beginners.

Analysis of Monday's deals:

30M chart of the GBP/USD pair

The GBP/USD pair continued its main movement on Monday, that is, upward. We have already said that the pair has been growing for more than two consecutive weeks, although there seems to be no good reason for it to do this. Even the Bank of England meeting did not take place! But the Federal Reserve meeting took place, at which the rate was ALREADY raised by another 0.75%. That is, in theory, the dollar should now grow, and not vice versa. However, we continue to note that perhaps we are now observing the market reaction to the future, not yet announced results of the BoE's meeting. We see no other reason to grow. The same European currency at this very time is moving much more modestly. There were few macroeconomic statistics on Monday, but there was still something. The final value of business activity in the manufacturing sector for July (52.1) was published in the UK, a similar index was released in the US, even in two versions: S&P (52.2) and ISM (52.8). In general, all three indices were not resonant and did not shock traders. Therefore, there was practically no reaction to them. Nevertheless, the pound has found reasons to continue rising.

5M chart of the GBP/USD pair

The GBP/USD pair continued its main movement on Monday, that is, upward. We have already said that the pair has been growing for more than two consecutive weeks, although there seems to be no good reason for it to do this. Even the Bank of England meeting did not take place! But the Federal Reserve meeting took place, at which the rate was ALREADY raised by another 0.75%. That is, in theory, the dollar should now grow, and not vice versa. However, we continue to note that perhaps we are now observing the market reaction to the future, not yet announced results of the BoE's meeting. We see no other reason to grow. The same European currency at this very time is moving much more modestly. There were few macroeconomic statistics on Monday, but there was still something. The final value of business activity in the manufacturing sector for July (52.1) was published in the UK, a similar index was released in the US, even in two versions: S&P (52.2) and ISM (52.8). In general, all three indices were not resonant and did not shock traders. Therefore, there was practically no reaction to them. Nevertheless, the pound has found reasons to continue rising.

How to trade on Tuesday:

The pound/dollar pair continues to maintain an upward trend on the 30-minute time frame and may continue to grow for several more days. However, we remind you that after the BoE meeting, the mood of traders may change sharply to bearish. Consolidating below the trend line will signal a change in trend. On the 5-minute TF on Tuesday it is recommended to trade at the levels 1.2106, 1.2186, 1.2216, 1.2245-1.2260, 1.2329-1.2337, 1.2371. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. There are no major events or reports scheduled in the UK and US for Tuesday. Thus, traders will have nothing to pay attention to during the day, but this does not mean that the pair will stand in one place. Still, it shows a trend movement in recent times.

Basic rules of the trading system:

1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.

2) If two or more deals were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.

3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.

4) Trade deals are opened in the time period between the beginning of the European session and until the middle of the US one, when all deals must be closed manually.

5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and 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 on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.