Analysis of transactions in the GBP / USD pair
A signal to buy emerged after GBP/USD hit 1.3624. However, there was no increase because the MACD line being far from zero limited the upside potential of the pair. A similar scenario occurred in the afternoon, when the pair reached 1.3603. The market signal that time was to sell, but since the MACD line was from zero, the downside potential was limited. That is the reason why the pair decreased by only 25 pips.
Friday's data on the US economy, as well as the speeches of FOMC members, increased dollar demand last Friday. But a turnaround could occur today if the report on UK retail sales exceeds expectations. Growth in business activity in the manufacturing and services sectors will also provoke a rise in GBP/USD, but if there are no active purchases above 1.3631, then traders should be careful with long positions. Markets will be closed in the afternoon for the US Presidents' Day, so volatility will be very low, as will trading volume.
For long positions:
Buy pound when the quote reaches 1.3631 (green line on the chart) and take profit at the price of 1.3665 (thicker green line on the chart). A rally will occur if activity in the UK services sector exceeds 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 1.3614, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.3631 and 1.3665.
For short positions:
Sell pound when the quote reaches 1.3614 (red line on the chart) and take profit at the price of 1.3580. Pressure will return if data on UK retail sales turn out weaker than expected. But 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 1.3631, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3614 and 1.3580.
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.
