Analysis of transactions in the GBP / USD pair
GBP/USD reaching 1.2626 prompted a sell signal in the market, however, having the MACD line far from zero limited the downside potential of the pair. The second test was more successful as a buy signal led to an increase of more than 30 pips, bringing the pair to 1.2654. Although there was another signal to buy, further upside potential was limited because the MACD line was still far from zero. No other signal appeared for the rest of the day.
The absence of statistics in the UK did not help pound on Monday, keeping it trading sideways. And since buyers failed to achieve new monthly highs, the upside potential of GBP/USD is likely to be limited at the end of this month.
Taking into account that no reports are scheduled to be released in the UK today, the difficulties with further growth will most likely increase. Upcoming data on Chicago PMI and consumer confidence will also lead to a rise in USD provided that the figures exceed expectations. But don't count on big movements as traders will most likely cling to large levels and try to turn the pair back from them.
For long positions:
Buy pound when the quote reaches 1.2625 (green line on the chart) and take profit at the price of 1.2658 (thicker green line on the chart). There is a chance for a rally today because there are no statistics scheduled 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 1.2597, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2625 and 1.2658.
For short positions:
Sell pound when the quote reaches 1.2597 (red line on the chart) and take profit at the price of 1.2555. Pressure will return as traders will most likely close their positions amid the end of the month. 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 1.2625, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2597 and 1.2555.
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.
