Hourly chart of the GBP/USD pair

The technical picture remains more clear and unambiguous for the GBP/USD pair. Sellers tried to gain a foothold below the upward trend line yesterday, which, we will remind, is one of the most important technical constructions. However, the attempt to overcome this line was unsuccessful (circled in red). Thus, either the upward movement will resume, or traders will make a second attempt to overcome it. We are inclined to the second option, although formally, after the rebound from this line and the reversal of the MACD indicator up (circled), traders should have started buying the pound. Those who did this currently made profit of about 40 points. If there is a new reversal of the MACD down, the pair's purchases will have to be closed. Although we would have done it already.

On Monday, novice traders of the pound/dollar pair could turn their attention to reports on business activity from the UK and the US in the areas of manufacturing. But, as we said in the EUR/USD article, these reports are now of extremely low significance. The UK is not releasing important information at the moment. Thus, the pound/dollar pair is traded exclusively on news and reports from America. It was trading like that until Friday, when a technical correction began (a correction that was caused not by news or reports, but by market participants closing their positions, which lowers the demand for a currency that had been actively bought before). Now we are witnessing a downward movement, which may develop if we exclusively talk about the pound/dollar pair. The fact is that a Bank of England meeting will take place this Thursday, during which a lot of negative information may come at the disposal of traders. The BoE may cut its key rate, hint that it will cut the key rate in the near future, may declare that "the economy will be recovering hard and for a long time", or "that the economy needs new significant cash injections." All this will reduce the demand for the pound sterling, as it reflects the deterioration or potential deterioration of the economy. We are also still waiting for the UK Q2 GDP report, which may also be a little good. The pound was appreciating for the entire month of July, it did not have its own reasons for growth. In fact, the pound did not increase in price, but it was the dollar that was getting cheaper. There were no reasons for the growth of the pound, and there is still no reason. Therefore, now it can become quite seriously cheaper.

The following scenarios are possible on August 4:

1) A buy signal formed yesterday (a rebound from the trend line and a reversal of the MACD indicator up). Since the price has not yet reached the first target (1.3117), and the MACD indicator has not turned down, you can stay with purchases. On the other hand, 40 points of profit is also not bad. You are not advised to consider making new purchases yet.

2) Sales, from our point of view, can be considered 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 1.3009 and 1.2953. We believe that today, the pair will try to gain a foothold below the trend line. There are no important events in the US and UK news calendar for Tuesday.

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.