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FX.co ★ Analysis and trading tips for GBP/USD on January 24

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Forex Analysis:::2022-01-24T07:18:55

Analysis and trading tips for GBP/USD on January 24

Analysis of transactions in the GBP / USD pair

A signal to sell emerged after GBP/USD hit 1.3587. However, the downside potential was limited because the MACD line was in the oversold area. On its second test, the market signal turned to buy, but it led to losses. Fortunately, the third attempt made progress as the sell signal prompted more than 30-pip increase, thanks to the MACD line moving below zero. The buy signal after the rebound to 1.3555 also led to a 20-pip increase in the pair.

Analysis and trading tips for GBP/USD on January 24

GBP/USD fell last Friday because retail sales data in the UK was lower than expected. The statements of Bank of England MPC member Katherine L. Mann also failed to help buyers curb the bear market.

A lot of reports will be released today, and all of them are likely to affect market direction. In particular, strong PMI data in the UK will prompt an increase in demand, as growth indicates a better outlook for the economy. In the afternoon, similar reports from the US will be published, which could return balance in the market. And most likely, traders will be cautious and focused on the Fed meeting this Wednesday, so it is better to bet on dollar rather than pound.

For long positions:

Buy pound when the quote reaches 1.3559 (green line on the chart) and take profit at the price of 1.3600 (thicker green line on the chart). Growth will continue if service activity in the UK exceeds expectations.

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 1.3530, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.3559 and 1.3600.

For short positions:

Sell pound when the quote reaches 1.3530 (red line on the chart) and take profit at the price of 1.3490. Pressure will return in case of weak UK data and increased bearish sentiment, prompted by hawkish actions of the Federal Reserve.

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 1.3559, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3530 and 1.3490.

Analysis and trading tips for GBP/USD on January 24

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.

Analyst InstaForex
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