Analysis of transactions in the GBP / USD pair
It can be clearly seen that the first test of 1.3430 occurred during the time that the MACD line was moving down from zero, provoking a signal to sell in the market. Sadly, the pair did not decline but rose above the level instead. Soon after, the second test of 1.3430 took place, but this time the MACD line was in the oversold area. This formed a signal to buy in the market, which provoked a 30-pip increase to 1.3467. Following that was a test on the level, but the MACD line was far from zero, so the upside potential was limited.
GDP data released yesterday pleased the market, but there was no special reaction to them. It only helped bullish traders hold yearly lows, which led to an upward correction in GBP / USD.
Today, it is important to note the upcoming data on UK manufacturing PMI as it may set off another upward correction. But in the afternoon, there will be a report on US consumer sentiment, which, if exceeded expectations, could lead to a rise in dollar and accordingly, a drop in GBP / USD.
For long positions:
Open a long position when pound reaches 1.3467 (green line on the chart) and take profit at the level of 1.3507 (thicker green line on the chart). The pair will climb higher if data from the UK exceed expectations.
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 1.3441, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3467 and 1.3507.
For short positions:
Open a short position when pound reaches 1.3441 (red line on the chart) and take profit at the level of 1.3408. Pressure will return if the fuel crisis in UK worsens.
But before selling, make sure that the MACD line is below zero, or is starting to move down from it.
The pair could also be sold at 1.3467, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3441 and 1.3408.
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.
