Analysis of transactions in the GBP / USD pair
GBP/USD reaching 1.2052 led to a buy signal in the market, however, having the MACD line far from zero limited the upside potential of the pair. Sometime later, the pound went near 1.2125, but since a few points were missing, sell positions were not opened. No other signal appeared for the rest of the day.
The Fed's decision to raise rates by 0.75% did not affect the pound in any way as it was already expected. Likewise, many bearish traders took profits before today's meeting of the Bank of England because even though it is a passing one, any unexpected changes during the meeting can seriously affect the direction of the market. If a more aggressive policy is announced, pound will continue to grow. If not, then it will remain within a wide side channel.
In the afternoon, data on building permits and new homes will be released in the US, followed by reports on the manufacturing index and jobless claims. As such, it is possible that risk appetite will return during the US trading session.
For long positions:
Buy pound when the quote reaches 1.2164 (green line on the chart) and take profit at the price of 1.2229 (thicker green line on the chart). There is a chance for a rally today, but only if the Bank of England raises interest rates. 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 1.2101, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2164 and 1.2229.
For short positions:
Sell pound when the quote reaches 1.2101 (red line on the chart) and take profit at the price of 1.2036. Pressure will return at any moment, especially if the ECB takes a softer stance on monetary policy. However, 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 1.2164, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2101 and 1.2036.
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.
