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Hourly chart of the GBP/USD pair
The situation has become much clearer with the GBP/USD pair, thanks to the first two days of the week. The pair has already reached two goals after the first buy signal was formed, without changing the direction of movement and without correcting every five minutes. Thus, the pound continues to strengthen against the dollar and can already reach the third final goal – the 1.2812 level. The reasons for such a strong growth have already been described in detail in the corresponding article on fundamental analysis. However, we will briefly discuss this issue here. In the UK, scientists are quite advanced in creating a vaccine against the coronavirus, which significantly reduces the likelihood of a second wave of the epidemic in this country, or at least reduces the risk of serious negative consequences of this second wave. After all, there were real hopes that the vaccine against the coronavirus would appear before the new year. It is obvious that in this case, the faster the nation is cured, the faster it will return to a full, normal life. Economic activity of the population, which is extremely important for the economy of the whole country, will be restored. Accordingly, the economy will begin to recover and will no longer be afraid of new waves of the pandemic. That's why the pound is growing now, especially amid the ever-increasing rates of disease in the US. Of course, vaccines are also being developed in the United States, but there is no such optimistic news from there yet. But there is news about the constant confrontation between US President Donald Trump, who belongs to the Republican party, and the Democrats, who lead many American cities and states that are now holding rallies and mass protests against the background of a racist scandal. Also, all Democratic mayors and governors clearly do not seek to follow Trump's calls to restart the economy, remove all restrictive measures and quell mass protests.
Technical analysis makes it possible for the British currency to continue growing. Since the price has overcome the 1.2734 level, the price has no visible obstacles on the way up. At the same time, we advise you to be prepared for a possible pullback and, if you are not ready to lose profit on the previous two buy signals, then close the deals without waiting for the 1.2812 level to be reached. Based on technical constructions, there are two possible scenarios for the development of events:
1) Since the first two targets have been reached and overcome, we have the right to expect the upward movement to continue to the 1.2812 level, which is the June 10 high. Currency pairs are very fond of testing the strength of previous price extremes and turning around them. However, they also love to overcome them, giving us new signals. Thus, the 1.2812 level is very important for determining the further trend. We are placing the Take Profit order just below the level of 1.2812.
2) But sales, from our point of view, are now risky to consider. Of course, you can try to get a signal about a rebound from the level of 1.2812 (if there is one), which will formally allow opening sales, but this is a rather subtle signal that will require additional analysis.
Important speeches and reports (always contained in the news calendar) can greatly affect 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.
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