24.08.202011:05 Forex Analysis & Reviews: Analysis and forecast for GBP/USD on August 24, 2020

Weekly

Following the results of the last five-day trading session, a reversal model of candle analysis appeared on the weekly chart of the GBP/USD pair, which can be described as a "Tombstone". This is a fairly strong reversal signal, which is often played back by market participants. As you can see, the pair is not allowed to go up by the 200 exponential moving average, which blocks the road in the north direction like a barrier. It is also necessary to note the unsuccessful attempt to break the resistance line of 1.5817-1.3184. All these factors suggest a decline in the British pound against the US dollar. If the course of trading confirms this assumption, the pair will fall into the key support zone of 1.3000-1.2980 and test it for a breakout. At the same time, closing the current weekly trading below 1.2980 will confirm the further implementation of the bearish scenario. Bulls will regain control of the market for GBP/USD only in the case of a true breakout of the 200 EMA, the indicated resistance line and closing the week above the previous highs at 1.3265.

Now about external and fundamental factors that can influence the price dynamics of the pound/dollar pair. Over the past weekend, the daily number of COVID-19 infections in the UK increased significantly, exceeding 1,200 people. A new focus of coronavirus has broken out in the suburbs of Manchester. People are forbidden to gather in groups of more than 20 people, and, if possible, avoid traveling on public transport.

This week, the fundamental background will be made up of macroeconomic reports from the United States, which will be published a lot. However, the main event will be the speech of US Federal Reserve Chairman Jerome Powell at the economic symposium in Jackson Hole. These and other events that will be mentioned directly on the day of their release can have a significant impact on the course of trading and on the closing results of the week.

Daily

As you can see, the trading of the last four days was held with variable success of the opposing sides, as indicated by the alternation of bullish and bearish candles. At the moment of writing, the pair is trading without a clearly defined direction, so we will consider both scenarios. As noted above, the main task for downside players is to break through the strong support zone of 1.3000-1.2980. This is not an easy task. However, everything is very difficult for bulls on the pound. They need to break and fix above 1.3135, where the red line of the Tenkan Ichimoku indicator passes, return the price above the falsely broken resistance line of 1.5817-1.3184, and then break through the strong resistance zone of sellers at 1.3253-1.3265. Only fixing above 1.3265 will give grounds to expect growth to higher prices.

In the meantime, I consider the main scenario for the GBP/USD pair to be a downward one. For those who agree with this opinion, I recommend considering opening short positions on the pound after rising to the price zone of 1.3120-1.3140. If bearish candlestick signals appear in the selected price area on the four-hour and/or one-hour chart, this will be the basis for opening sales for the GBP/USD currency pair.