Analysis of transactions in the GBP / USD pair
When GBP/USD tested 1.2094, the MACD was far away from zero, so the upside potential was limited. But in the afternoon, its second test happened when the MACD line had just started to move above zero, which was a good signal to buy. This prompted to a price increase of more than 40 pips. Sadly, the target price of 1.2140 was not reached.
Today promises to be another calm day as investors are likely to be preparing for tomorrow's release of US inflation report. The highest value GBP/USD could reach is yesterday's local resistance level of 1.2135. In the afternoon, data on small business optimism, labor productivity and labor costs will be published in the US, all of which will affect the direction of the market. Expect the pair to trade horizontally.
For long positions:
Buy pound when the quote reaches 1.2092 (green line on the chart) and take profit at the price of 1.2132 (thicker green line on the chart). There is a chance for a rally today, but only after the breakdown of 1.2092.
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 1.2068, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2092 and 1.2132.
For short positions:
Sell pound when the quote reaches 1.2068 (red line on the chart) and take profit at the price of 1.2031. Pressure will increase if the attempt to continue the upward correction fails.
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 1.2092, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2068 and 1.2031.
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.
