FX.co ★ Analysis and trading tips for GBP/USD on August 2

Analysis of transactions and tips for trading GBP/USD

Further decline became limited as the test of 1.2790 coincided with the sharp drop of the MACD line from zero. Meanwhile, purchases on the rebound from 1.2763 led to a correction of about 20 pips.

Pound continued to fall amid weak UK data on manufacturing activity for July. The sharp decline in the home price index also pointed to growing problems in the real estate market due to high interest rates.

Do not expect a large sell-off in GBP/USD before the Bank of England meeting tomorrow, given the empty macroeconomic calendar in the UK today. Bet more on the pair's upward correction and on purchases.

For long positions:

Buy when pound hits 1.2788 (green line on the chart) and take profit at the price of 1.2841 (thicker green line on the chart). Growth will occur as part of an upward correction before the Bank of England's meeting. However, when buying, ensure that the MACD line lies above zero or rises from it.

Pound can also be bought after two consecutive price tests of 1.2758, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2788 and 1.2841.

For short positions:

Sell when pound reaches 1.2758 (red line on the chart) and take profit at the price of 1.2703. Pressure will return in case of a fall below the weekly lows. However, when selling, ensure that the MACD line lies below zero or drops down from it.

Pound can also be sold after two consecutive price tests of 1.2788, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2758 and 1.2703.

What's on the chart:

Thin green line - entry price at which you can buy GBP/USD

Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.

Thin red line - entry price at which you can sell GBP/USD

Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.

MACD line- it is important to be guided by overbought and oversold areas when entering the market

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.