Analysis of transactions in the GBP / USD pair
GBP/USD reaching 1.2220 prompted a sell signal in the market, however, having the MACD line far from zero limited the downside potential of the pair. Shortly after that, pound jerked up and hit 1.2265, forming a buy signal. At that time, the MACD line was far from zero, limiting the upside potential of the pair. When the pair tested the level again, the MACD line was in the overbought area, so the signal to sell triggered a decrease of around 30 pips. No other signal appeared for the rest of the day.
Although the lack of statistics helped pound, there was no upward correction in GBP/USD yesterday. But today there is every chance for further growth as the absence of statistics will play on the side of buyers, allowing them to push the pair above 1.2274. Furthermore, in the afternoon, US data may harm dollar as the US housing market has not been in the best shape lately due to higher interest rates. This, however, may be offset by the speech of Fed member Loretta Mester.
For long positions:
Buy pound when the quote reaches 1.2274 (green line on the chart) and take profit at the price of 1.2331 (thicker green line on the chart). There is a chance for a rally today, but only in the morning. Nevertheless, remember that when buying, the MACD line should be above zero, or is starting to rise from it. It is also possible to buy at 1.2231, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2274 and 1.2331.
For short positions:
Sell pound when the quote reaches 1.2231 (red line on the chart) and take profit at the price of 1.2178. Pressure will return if there are no active purchases above 1.2274. 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 1.2274, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2231 and 1.2178.
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 decision based on the current market situation is an inherently losing strategy for an intraday trader.
