Analysis of transactions in the GBP / USD pair
Market signals on Friday said to sell GBP / USD, however, the MACD line was far from zero so the decrease was very limited. Fortunately, the indicator moved below zero in the afternoon, so the pair was able to dip by 25 pips twice. All in all, the downward movement was 50 pips.
The unexpected rate hike by the Bank of England did not push GBP / USD up because the situation with coronavirus threatens to set off lockdowns during the Christmas and New Year holidays.
Most likely, the decline will continue today because apart from the data on UK industrial orders, nothing more is expected. In the afternoon, the US will release a report on leading indicators, but it will not bring serious changes to the market.
For long positions:
Buy pound when the quote reaches 1.3229 (green line on the chart) and take profit at the price of 1.3272 (thicker green line on the chart). There is a low chance though that the pair will rally today.
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 1.3200, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3229 and 1.3272.
For short positions:
Sell pound when the quote reaches 1.3200 (red line on the chart) and take profit at the price of 1.3162. Bears will control the market, so it is best to bet on a decline.
Before selling, make sure that the MACD line is below zero, or is starting to move down from it. Pound can also be sold at 1.3229, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3200 and 1.3162.
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.
