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FX.co ★ Analysis and trading tips for GBP/USD on August 24

Analysis and trading tips for GBP/USD on August 24

Analysis of transactions in the GBP / USD pair

Pound tested 1.1725 at a time when the MACD was far from zero, which limited the downside potential of the pair. Sometime later, it hit 1.1775 and tested it when the MACD line was in the overbought area, which was a good signal to sell. However, there was also no large price decrease as the data on the US economy was disappointing. When the pair tested the level again, the MACD line has gone up from zero, which was a good signal to buy. This time, the pair rose by more than 70 pips.

Analysis and trading tips for GBP/USD on August 24

Although the manufacturing PMI in the UK was weaker than expected, pound did not fall as service PMI, which is more important for the economy, exceeded expectations. However, quotes are unlikely to hit weekly highs because there are no important statistics that could drive demand up today. There is a chance for an increase in the afternoon, when reports on the volume of orders for durable goods and pending home sales in the US fell short of forecasts. Such weak indicators are likely to undermine traders' confidence in the future, which will put pressure on dollar and lead to another rush of pound upwards from annual lows.

For long positions:

Buy pound when the quote reaches 1.1821 (green line on the chart) and take profit at the price of 1.1867 (thicker green line on the chart). Demand will rise only if the US reports weak economic data.

Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1787, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1821 and 1.1867.

For short positions:

Sell pound when the quote reaches 1.1787 (red line on the chart) and take profit at the price of 1.1734. Pressure could return at any moment, especially if the US reports better-than-expected economic data, and if the Fed remains hawkish on their monetary policy.

Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1821, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1787 and 1.1734.

See also: Start Forex trading with a European level broker!
Analysis and trading tips for GBP/USD on August 24

What's on the chart:

The thin green line is the key level at which you can place long positions in the GBP/USD pair.

The thick green line is the target price, since the quote is unlikely to move above this level.

The thin red line is the level at which you can place short positions in the GBP/USD pair.

The thick red line is the target price, since the quote is unlikely to move below this level.

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

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.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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