Hot forecast for GBP/USD on 08/28/2019 and trading recommendation

The unexpectedly good data on approved mortgages in the UK made it possible for the pound to slightly improve its position. The total number of approved mortgages increased from 42,775 not to 42,800, but to 43,342. Considering the fact that the real estate market in the United Kingdom is one of the main criteria for Great Britain's investment appeal, and the increase in the number of approved mortgages indicates an improvement in the situation in this market, the strengthening of the pound is not something strange. However, after this news, there was a certain informational vacuum for financial markets, since the macroeconomic calendar, in fact, is completely empty until Thursday. Well, the lack of news is a big problem for the media, which just makes money from the distribution of news. So if there is no news, then you need to come up with them. Which was done, just at the very moment when the pound completely worked out the news about the increase in the number of approved mortgage loans, and began to demonstrate attempts to fall. Indeed, in fact, globally, the picture has not changed.

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At this very moment, in a number of mass media, citing anonymous sources, news appeared that the British government was counting on a positive outcome of new negotiations with the European Union on Brexit. Moreover, the emphasis in the news was that Angela Merkel and Emmanuel Macron, during negotiations with Boris Johnson, allegedly softened their rhetoric, especially on the border between Ireland and Northern Ireland. Based on this assumption, an anonymous source said that there is an opportunity to avoid Backstop, which is the main obstacle to reaching a divorce agreement. So the news that the UK and the European Union, at least hypothetically could come to an agreement on Brexit, immediately led to a new wave of pound growth. True, the growth itself was limited, since it was hard to believe in such things. Thus, it's not worth waiting for a rebound. At least until the official statements of London or Brussels on this issue.

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The GBP/USD pair once again returned to the level of 1.2300 amid the information flow about which I wrote above. What we have is 12 trading days expressed in corrective movement from the psychological level of 1.2000. Are there any prerequisites for a change in the main trend, not at all, we continue to hold the downward mood and the current correction, this temporary factor in global consideration.

It is likely to assume a temporary fluctuation within 1.2250-1.2300, after which, depending on the information background, the path of further progress will be chosen. Traders are advised not to take harsh actions and, for starters, to identify a clear consolidation of prices relative to existing boundaries.

Concretizing all of the above into trading signals:

• We consider long positions in case of price consolidation above 1.2300, towards 1.2350.

• We consider short positions in case of price consolidations below 1.2250, towards 1.2200.

From the point of view of a comprehensive indicator analysis, we see that indicators in all the main time sections signal a further upward trend. It is worth considering such a moment that in the event of a slowdown, we will see temporary versatile interest in the minute and hour intervals, until the formation of the move.

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The material has been provided by InstaForex Company - www.instaforex.com