Analysis of transactions in the GBP / USD pair
GBP/USD reaching 1.2219 prompted a sell signal in the market, however, having the MACD line far from zero limited the downside potential of the pair. Similarly, there was no sharp movement after the pound reached 1.2268 because the MACD line was still away from zero. It was only during the second test of the level that the pair showed a decrease as the MACD line, by that time, was in the overbought area. It pushed the pair down by more than 40 pips.
Pound fell further after the UK reported weaker-than-expected PMI data for June this year. Likewise, reports from the US did not lead to a surge in volatility, while the speech of Fed chairman Jerome Powell did not support dollar as it repeated exactly everything he said the day before.
A lot of reports are scheduled to be released today, and these are retail sales data and core retail sales index from the UK. Many expect to see a decline in these indicators, so they will not affect the market much. There will also be a speech from MPC member Jonathan Haskel. In the afternoon, there will be data on consumer expectations and consumer sentiment from the US, followed by a report on new home sales. The latter could hurt dollar as its figure is expected to go down. Statements from FOMC member James are unlikely to spark market volatility.
For long positions:
Buy pound when the quote reaches 1.2286 (green line on the chart) and take profit at the price of 1.2335 (thicker green line on the chart). There is a chance for a rally today, but only if upcoming UK statistics exceed expectations. 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 1.2257, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2286 and 1.2335.
For short positions:
Sell pound when the quote reaches 1.2257 (red line on the chart) and take profit at the price of 1.2199. Pressure will return if the UK reports weak economic statistics and if there is no bullish activity at current lows. 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 1.2286, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2257 and 1.2199.
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.
