Daily analysis of GBP/USD for July 31. The second bullish divergence will support the pound sterling.
The GBP/USD pair on the 4-hour chart made a reversal in favor of the British currency after the formation of a bullish divergence in the CCI indicator, and began the growth process in the direction of the Fibo level of 161.8% – 1.3301. On July 31, there are no new brewing divergences. The passage of the last low of the divergence will work in favor of the US dollar and the resumption of the fall of quotations, and the consolidation under the correction level of 200.0% will increase the chances of the pair to further decline in the direction of the next Fibo level of 261.8% – 1.2638.
The Fibo grid is built on the extremes of March 1, 2018 and April 17, 2018.
On the hourly chart, the quotes of the pair performed a rebound from the correction level of 38.2% – 1.3112. There was also a bullish divergence in the CCI indicator, which allows us to count on continuing growth in the direction of the corrective level of 50.0% – 1.3160. The consolidation of quotations under the Fibo level of 38.2% can be interpreted as a reversal in favor of the US currency and expect a resumption of the fall in the direction of the correction level of 23.6% – 1.3052.
The Fibo grid is built on the extremes of July 9, 2018 and July 19, 2018.
Recommendations for traders:
Purchases of the GBP/USD pair can now be opened with a target of 1.3160 and a Stop Loss order under the correction level of 38.2%, since there was a pullback from the Fibo level of 1,3112 (hourly chart) and a bullish divergence was formed.
It will be possible to sell the GBP/USD pair with a target of 1.3052 and a Stop Loss order above the correction level of 38.2%, if there is a close below the Fibo level of 1.3112.