Analysis of transactions in the GBP / USD pair
GBP/USD reaching 1.2545 prompted a buy signal in the market, which led to a 10 pip increase as the MACD line was just starting to move above zero. However, the quote turned down immediately after and retested 1.2545, forming a sell signal. This time, it provoked a 25-pip decrease in the pair and reached 1.2518, where movement became limited as the MACD was already far from zero. In the afternoon, another sell signal appeared at 1.2545, resulting in another 20-pip decrease. Its fourth test then led to a buy signal, which prompted a 50-pip increase as the MACD was moving above zero.
GBP/USD reached new monthly highs after traders did not find anything new in the minutes of the Fed's May meeting. Contrary to what was expected, there were no hints that the central bank will raise rates again at the next meetings.
However, today, it is likely that the pound will turn down as there are no statistics scheduled to be released in the UK. In the afternoon, data on US jobless claims and second estimate of the 1st quarter GDP will support the dollar, while the report on pending home sales may strengthen the emerging trend in the pair provided that its value turns out better than expected.
For long positions:
Buy pound when the quote reaches 1.2575 (green line on the chart) and take profit at the price of 1.2610 (thicker green line on the chart). There is a chance for a rally today because there is no scheduled statistics to be released. However, note that when buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.2553, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2575 and 1.2610.
For short positions:
Sell pound when the quote reaches 1.2553 (red line on the chart) and take profit at the price of 1.2516. Pressure is likely to return if there is no bullish activity in the market before and after the release of the US GDP report for the 1st quarter. However, note that when selling, make sure that the MACD line is below zero, or is starting to move down from it. Pound can also be sold at 1.2575, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2553 and 1.2516.
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.