Analysis of transactions in the GBP / USD pair
The test of 1.1782 occurred at the time when the MACD line moved up quite a lot from zero, which limited the upward potential of the pair. Some time later, another test took place, but this time the MACD line had just started to move upwards, which was a good reason to buy. This led to a price increase of about 30 pips. In the afternoon, pound tested 1.1719, however, the MACD line was in the oversold area, so the downside potential was limited. It was only during the second test did the quote moved by over 70 pips as indicators signaled to buy in anticipation of a reversal.
Today is a very important day as a number of reports are being released on the UK labor market, on which both the economy and inflation now depend. The most interesting is average wages because its decline is bad for the economy. However, it could have a positive effect on inflationary pressure, which the Bank of England is actively fighting against. In the afternoon, there will be reports on the US producer price index and the manufacturing index, but investors are unlikely to take the figures seriously. Thus, it is advised to focus more on the speeches of FOMC members Lisa Cook and Michael Barr.
For long positions:
Buy pound when the quote reaches 1.1817 (green line on the chart) and take profit at the price of 1.1872 (thicker green line on the chart). Growth will occur if there is strong data on the labor market. 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 1.1754, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1817 and 1.1872.
For short positions:
Sell pound when the quote reaches 1.1754 (red line on the chart) and take profit at the price of 1.1698. Pressure may increase after very weak reports and rising unemployment. 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 1.1817, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.1754 and 1.1698.
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.
