Analysis of transactions in the GBP / USD pair
When GBP/USD tested 1.2185, the MACD had just started to move above zero, which was a good signal to buy. However, quotes decreased again after rising by just 15 pips because of weak PMI data in the Euro area. Sell-offs continued in the afternoon and led to the test of 1.2139. It happened when the MACD was far from zero, so the downside potential was limited. No other signals appeared for the rest of the day.
Pound came under pressure amid disappointing PMI data in the UK. However, the situation may turn around if the Bank of England decides to raise interest rates by 0.5% today. But given the existing problems in the UK, raising rates is unlikely to solve the crisis. It would only exacerbate them, which means that a bull marlket will not be long-term. With regards to the US, data on jobless claims will be released, followed by a report on the foreign trade balance. Most likely, imports will continue to decline, while exports will grow, which will support dollar. The speech of FOMC member Loretta Mester could also be hawkish, which will aggravate risk appetite.
For long positions:
Buy pound when the quote reaches 1.2163 (green line on the chart) and take profit at the price of 1.2235 (thicker green line on the chart). There is a chance for a rally today, but only if the Bank of England remains hawkish in its monetary policy.
Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.2110, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2163 and 1.2235.
For short positions:
Sell pound when the quote reaches 1.2110 (red line on the chart) and take profit at the price of 1.2059. Pressure will increase if the Bank of England presents a negative outlook for the UK economy.
Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.2163, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2110 and 1.2059.
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.
