Analysis of transactions in the GBP / USD pair
The test of 1.1555 when the MACD line was just starting to move above zero prompted a signal to buy, which led to a price increase of around 25 pips. No other signals appeared for the rest of the day.
Pound did not move much last Friday as market reaction to the US unemployment rate and number of non-farm payrolls were subdued because the data were mixed. Today, however, looks to be more interesting as reports on business activity and PMI in the UK are coming. Weak figures are likely to prompt a collapse in pound and an update of the 2020 low. Most of the movement will occur after the PMI report since there are no important statistics scheduled to be released in the afternoon.
For long positions:
Buy pound when the quote reaches 1.1484 (green line on the chart) and take profit at the price of 1.1527 (thicker green line on the chart). Growth will occur if activity in the services sector remains at July levels.
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 1.1446, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1484 and 1.1527.
For short positions:
Sell pound when the quote reaches 1.1446 (red line on the chart) and take profit at the price of 1.1407. Pressure could return at any moment, especially if UK PMI is revised for the worse.
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 1.1484, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1446 and 1.1407.
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.
