Analysis of transactions in the GBP / USD pair
Pound tested 1.1378 at a time when the MACD line was far from zero, which limited the downside potential of the pair. Sometime later, it tested the level again, but this time the MACD line was recovering from the oversold area, which was a good signal to buy. The pair, however did not increase, leading to losses. The test of 1.1405 also failed as the MACD line was far from zero that time.
There are no economic reports expected in the UK today, so pound is likely to rise ahead of tomorrow's Fed meeting. In addition, reports on the US real estate market are due out in the afternoon, and a sharp decline in the indicators could hurt dollar as they play an important role in determining future economic outlook. Such an event will lead to a rise in GBP/USD
For long positions:
Buy pound when the quote reaches 1.1440 (green line on the chart) and take profit at the price of 1.1478 (thicker green line on the chart). Growth is unlikely, but there is a chance for an upward correction in the morning.
Take note that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.1411, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1440 and 1.1478.
For short positions:
Sell pound when the quote reaches 1.1411 (red line on the chart) and take profit at the price of 1.1364. Pressure will return amid an unsuccessful attempt to rise above 1.1450.
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 1.1440, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1411 and 1.1364.
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.
