Analysis of transactions in the GBP / USD pair
GBP/USD tested 1.1956 on Monday. At that time, the MACD line was quite far from zero, so the downside potential was limited. Some time later, another test of the level took place, but this time, the MACD line was in the oversold area. Buying was rather appropriate in this scenario, so the pair rose by 25 pips. Then by mid-day, another test of 1.1956 occurred, during which the MACD line was moving below zero. This made selling appropriate, which led to a 20-pip decrease in the pair. Some sellers even managed to take more than 40 pips from the market. As for purchases around 1.1911, it led to losses as the price increase was only 10 pips.
The speech of Bank of England Governor Andrew Bailey did not lead to a change in market sentiment, and a sharp deterioration in appetite risk returned pressure on pound in the afternoon. The reason for the latter is the statements of FOMC member John Williams, which were identical to those of his peers who believe that further rate hikes are necessary.
There is nothing that could support pound today as even the speech of MPC member John Cunliffe is of little interest to the market. Meanwhile, the dollar is likely to rise as the NFIB report on small business confidence and the US Redbook index are also of little concern.
For long positions:
Buy pound when the quote reaches 1.1885 (green line on the chart) and take profit at the price of 1.1935 (thicker green line on the chart). Although there is little chance for a rally today, buyers can do so when the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.1835, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1885 and 1.1935.
For short positions:
Sell pound when the quote reaches 1.1835 (red line on the chart) and take profit at the price of 1.1796. Pressure will continue in the absence of positive news and negative market sentiment. 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 1.1885, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1835 and 1.1796.
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.
