Analysis of transactions in the GBP / USD pair
GBP / USD continued to move up on Monday even though the MACD line was far away from zero. Apparently, traders still took long positions despite knowing that the pair has limited upward potential. The weaker-than-expected data on UK PMI also failed to put pressure on the pair.
Most likely, this bullish move will continue today especially if the Bank of England members address the issue on bond purchases. Data on US home sales and manufacturing index may also contribute to the rally, but only if the figures are worse than expected as such will put pressure on dollar.
For long positions:
Open a long position when pound reaches 1.3752 (green line on the chart), and then take profit at the level of 1.3799 (thicker green line on the chart). GBP / USD may climb higher after the speech of Bank of England representatives. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.
It is also possible to buy at 1.3714 and 1.3661, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3752 and 1.3799.
For short positions:
Open a short position when pound reaches 1.3714 (red line on the chart), and then take profit at the level of 1.3661. A decline will occur if the Bank of England says it will again take a wait-and-see attitude on monetary policy. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.
It is also possible to sell at 1.3752 and 1.3799, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3714 and 1.3661.
What's on the chart:
The thin green line is the key level at which you can place long positions in the GBP/USD pair.
The thick green line is the target price, since the quote is unlikely to move above this level.
The thin red line is the level at which you can place short positions in the GBP/USD pair.
The thick red line is the target price, since the quote is unlikely to move below this level.
MACD line - when entering the market, it is important to be guided by the overbought and oversold zones.
Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.
