Analysis of transactions in the GBP / USD pair
GBP/USD reaching 1.2473 led to a sell signal in the market, however, having the MACD line far from zero limited the downside potential of the pair. Some time later, the pair tested the level again, but this time the signal that emerged was to buy. That, however, also led to losses as the pair continued to move down. Purchases at 1.2437 also did not bring the expected result.
GBP/USD declined last Friday because demand for dollar surged after the US reported that its CPI hit another record high in May.
Today, a number of statistics are scheduled to be released in the UK, and these are volume of industrial production, trade balance and GDP. A fall in these indicators, especially in GDP, will lead to the further fall of the pound. There are no scheduled statistics in the US, so the pair may hit a lower low in the afternoon, then hang in a horizontal channel. The speech of Fed member Lyle Lael Brainard will not provide additional support to the dollar as it is already clear that further interest rate hikes from the Fed cannot be avoided in the near future.
For long positions:
Buy pound when the quote reaches 1.2290 (green line on the chart) and take profit at the price of 1.2350 (thicker green line on the chart). However, there is little chance for a rally today, even with good data on GDP. Nevertheless, 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 1.2242, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2290 and 1.2350.
For short positions:
Sell pound when the quote reaches 1.2242 (red line on the chart) and take profit at the price of 1.2185. Pressure will return to the market at any moment. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2290, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2242 and 1.2185.
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.
