Analysis of transactions in the GBP / USD pair
The test of 1.1817 occurred at the time when the MACD line moved up quite a lot from zero, which limited the upward potential of the pair. Sell-offs at 1.1872 also did not bring much result. No other signals appeared for the rest of the day.
Yesterday's data on the UK labor market strengthened the position of pound as the situation has not yet reached a critical level and investors did not see anything wrong with a slight increase in unemployment. But it is much more interesting how traders will react today to the figures on the consumer price index and the UK producer price index. Rising inflation is likely to spoil the mood of the Bank of England, forcing it to further raise rates against the backdrop of an economy tending to decline. The speech of Bank of England President Andrew Bailey will also set the direction of pound.
Data in the afternoon also promises to be interesting as ahead are reports on retail sales and industrial production in the US. If all indicators turn out to be better than expected, demand for dollar will return, which will exacerbate the downward correction in GBP/USD. Speeches by Fed representatives John Williams and Christopher Waller can also play on the side of dollar, as will an aggravation of the geopolitical situation in the world after yesterday's arrival of two missiles on the territory of Poland, which claimed the lives of people.
For long positions:
Buy pound when the quote reaches 1.1898 (green line on the chart) and take profit at the price of 1.1966 (thicker green line on the chart). Growth will occur if there is strong data on UK inflation and hawkish statements by Bank of England President Andrew Bailey. 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 1.1851, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1898 and 1.1966.
For short positions:
Sell pound when the quote reaches 1.1851 (red line on the chart) and take profit at the price of 1.1774. Pressure may increase if inflation continues to be out control 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 1.1898, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.1851 and 1.1774.
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.
