05.08.202216:12 Forex Analysis & Reviews: Trading Signal for GBP/USD for August 5 - 8, 2022: buy above 1.2015 (weekly support - psychological level)

Relevance up to 10:00 UTC--4

Exchange Rates 05.08.2022 analysis

GBP/USD weakened after the strong US jobs report. Before the announcement, the British pound traded above the 200 EMA and below the 21 SMA.

The US report caused the pound to break the 200 EMA sharply and it is now approaching the psychological level of 1.2000.

The US non-farm payrolls (NFP) showed that the US economy added 528,000 jobs during the month of July, more than doubling the consensus of 250,000 jobs.

This fundamental data gave a strong bullish impulse to the US dollar (USDX) which put downward pressure on all crosses against the dollar such as the pound and the euro.

The pound still remains within the uptrend. This technical correction will be seen as an opportunity to resume buying. But as long as it remains trading above the psychological level of 1.20, it could mean recovery and GBP/USD could resume its bullish cycle and reach the area 1.2300 and 1.25 in the short term.

If you are a sample follower, we invite you to review our previous GBP/USD analysis reports. In them, we point out the strong downward pressure that the pound was subjected to below 4/8 Murray. Our downside target has been met and we now expect a technical bounce back above the psychological level of 1.2000.

According to the 4-hour chart, we can see that the pound has formed a pattern of shoulders and head. If the trading instrument makes a sharp break below 1.20, it could confirm the signal and fall and reach the zone 1/8 Murray at 1.1840.

For the British pound to resume its bullish cycle, we should expect a daily close above the 200 EMA located at 1.2124 and a close above the 21 SMA located at 1.2160. Above both levels, the British Pound is likely to hit levels of 1.2207, 1.2290 and even hit 5/8 Murray at 1.2329.

Our trading plan for the next few hours is to wait for a consolidation or rebound around 1.2015 to buy with targets at 1.2085, 1.2124, and 1.2207.

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

Dimitrios Zappas,
Analytical expert of InstaForex
© 2007-2022
Benefit from analysts’ recommendations right now
Top up trading account
Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.

  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
  • Ferrari from InstaForex
    Top up your account with at least $1,000
    join the contest and win Ferrari
    F8 Tributo
  • Chancy Deposit
    Deposit your account with $3,000 and win $1,000
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
Can't speak right now?
Ask your question in the chat.