FX.co ★ Trading Signal for GBP/USD for August 28-29, 2023: buy above 1.2573 (3/8 Murray - 21 SMA)

Early in the American session, the British pound (GBP/USD) is trading around 1.2589 above the 3/8 Murray and above the 21 SMA.

We can expect the British pound to continue rising in the next few hours and GBP/USD could reach 1.2630, the top of the downtrend channel formed since August 21.

In case GBP/USD trades above 1.2630 and breaks out of the downtrend channel sharply and if it consolidates above this area, the instrument is likely to strengthen. In case this scenario occurs, GBP/USD could reach the 200 EMA located at 1.2675 and up to 4/8 Murray (1.2695). Both levels could act as strong resistance.

If the pound breaks above 1.2830, we could expect a recovery to the psychological level of 1.30. On the contrary, below 1.2817, there is strong downward pressure. As long as the GBP/USD pair approaches this level, it will be seen as an opportunity to sell.

On the H-1 chart, we can see the formation of the head-and-shoulders pattern. It suggests that a recovery of the GBP/USD pair could occur in the short term and it could reach 1.2695 (4/8 Murray).

On the condition of a close below the low of August 25 located at 1.2547 on the H-4 chart, GBP/USD might continue its downward movement and could reach the psychological level of 1.25. This level could attract buyers waiting for a strong technical bounce. If this area is broken, then the pair could fall to 2/8 Murray at 1.2451 and as low as 1.2329 (1/8 Murray).

Our trading plan for the next few hours is to buy the British pound above 3/8 Murray located at 1.2573 with targets at 1.2630 and 1.2695. The eagle indicator is giving a positive signal. We assume there will be a recovery in GBP/USD in the next few days.