Hourly chart of the GBP/USD pair.
With the GBP/USD currency pair, the situation has become a little clearer. We have put a new downward trend line on the chart, which now helps with determining the trend. As we can see, it is now descending. News from America and Britain no longer make traders buy the pound. The trend has changed, at least now we can draw this conclusion. This means that a pair can be sold near the trend line. It is ideal to do this in close proximity to the trend line or after a rebound from it. Last week's news from the UK mainly made it clear that the economy is recovering at a much slower pace than expected. This was signaled by the GDP report with a real value of only 1.8%. Plus, if there is no trade deal between Britain and the European Union, the country's economy may suffer even more, and investors will decrease, which will reduce demand for the pound. In America, however, the main concern is due to the epidemiological situation, as more than 77,000 new coronavirus diseases have been registered in the past 24 hours. Thus, the US dollar is now at risk, as the difficult situation with the epidemic will also affect the country's economy. Based on this, we would say that the dollar and the pound are now approximately equal, if you look only at the news and economic reports. Only the technical picture slightly simplifies the analysis and makes it clear that it is more likely that the quotes will fall now. At least as long as the price is below the trend line.
Technical analysis, as we have already found out, predicts a further decline in the quotes of the pound/dollar pair. Therefore, as a signal to sell, you can use a reversal of the pair near the downward trend line, a rebound from the trend line, or, for example, the output of the Stochastic indicator from the "above 80" area. But it is not recommended to buy a pair until the price is fixed at the end of the hour above the trend line. Based on these technical constructions, there are two possible scenarios:
1) Since we now have a downward trend line, we again recommend selling the pound with a target of about 70 points down. In other words, we place the Take Profit order near the level of 1.2479, which is the first target.
2) If the pair closes above the trend line at the end of the next hour (we assume that this may happen around the level of 1.2615), this will be a buy signal. In this case, we recommend buying a pair, and you can fix the profit around the level of 1.2664 manually, or by placing a Take Profit order.
Important speeches and reports (always contained in the news calendar) can greatly affect the movement of the 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 reversal of the price 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 is the key to success in trading for a long period of time.
