Analysis of transactions in the GBP / USD pair
The test of 1.1462 happened when the MACD line was far below zero, which limited the downside potential of the pair. In the afternoon, another test took place, but this time the MACD line had just started to move under zero, which was a good reason to sell. This led to a price decrease of around 50 pips.
The Fed's decision on its interest rate initially led to the rise of GBP/USD, however, Jerome Powell's statements returned the pressure on the pair, which resulted in a massive sell-off and continuation of the bear market.
Today is a very important day as it is the Bank of England's turn to announce their decision on interest rates. But no matter what the central bank says, it is unlikely to see a large increase in pound, especially since it is ready to fall to the next monthly lows and continue a downward trend. In the afternoon, there is data on US jobless claims, followed by the reports on foreign trade balance and business activity in the services sector from ISM. Good indicators will strengthen the position of dollar and lead to another serious downward movement of GBP/USD.
For long positions:
Buy pound when the quote reaches 1.1420 (green line on the chart) and take profit at the price of 1.1485 (thicker green line on the chart). Growth will occur after a very dovish rhetoric of the Governor of the Bank of England. But remember that when buying, the MACD line should be above zero or is starting to rise from it.
Pound can also be bought at 1.1379, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1420 and 1.1485.
For short positions:
Sell pound when the quote reaches 1.1379 (red line on the chart) and take profit at the price of 1.1324. Pressure may return after the meeting of the Bank of England. But 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 1.1420, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1379 and 1.1324.
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.
