Analysis of transactions in the GBP / USD pair
GBP / USD reached 1.3597 at a time when the MACD line was far from zero. That limited the upside potential of the pair, so traders had no choice but to avoid buying. Surprisingly, in the afternoon, longs also led to losses even though the indicator was already in the oversold area. The pair continued to fall instead of increasing as expected.
There is no UK data to be released today so there is a high chance that GBP / USD will rise in the morning. By afternoon, the US will publish a report on small business optimism, but it is of little interest. Markets will focus instead on the statements of Fed members Loretta Mester and Esther George, as well as Fed Chairman Jerome Powell.
For long positions:
Buy pound when the quote reaches 1.3601 (green line on the chart) and take profit at the price of 1.3631 (thicker green line on the chart). Growth will occur if traders manage to push GBP / USD above the January highs.
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 1.3584, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3601 and 1.3631.
For short positions:
Sell pound when the quote reaches 1.3584 (red line on the chart) and take profit at the price of 1.3555. Demand will decrease if the Fed takes on a tough stance in monetary policy.
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 1.3601, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3584 and 1.3555.
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.
