Analysis of transactions in the GBP / USD pair
Pound tested 1.1517 in the afternoon, prompting a signal to buy in the market. This led to a price increase of around 25 pips, which offset the losses in the morning.
GBP/USD fell on Tuesday amid weak business activity in the UK construction sector. Then, better-than-expected data on US PMI put further pressure on the pair.
Ahead are parliamentary hearings on the Bank of England;s monetary policy, followed by a speech from Andrew Bailey. Most likely, he will adhere to further rate increases, which can support pound, albeit temporarily. US trade surplus is due out in the afternoon, but much more important will be speeches from FOMC members Loretta Mester and Lael Brainard. Their statements are likely to support dollar, which will return the pair into a bear market.
For long positions:
Buy pound when the quote reaches 1.1525 (green line on the chart) and take profit at the price of 1.1568 (thicker green line on the chart). Growth will occur if the Bank of England remains hawkish over 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 1.1490, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1525 and 1.1568.
For short positions:
Sell pound when the quote reaches 1.1490 (red line on the chart) and take profit at the price of 1.1427. However, pressure may be temporarily limited due to parliamentary hearings.
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 1.1525, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1490 and 1.1427.
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.
