Analysis of transactions in the GBP / USD pair
The test of 1.2245 occurred at a time when the MACD line had just started to move above zero, which was a good reason to buy. This led to a price increase of over 40 pips, in which the quote hit 1.2285. Selling from this price was not very successful because the pair did not go down immediately. No other signals appeared for the rest of the day.
The smaller contraction in UK GDP in the third quarter did not make investors too happy, but the monthly growth exceeded expectations, so pound romovese, albeit temporarily. However, today, a number of labor market reports are scheduled, such as the changes in jobless claims, unemployment rate and average UK earnings. A decline in all indicators will lead to a momentary drop in pound, especially since the UK trade balance data and the Bank of England's financial stability report will not have much impact on the market. Meanwhile, the speech of Bank of England Governor Andrew Bailey will be decisive as he may shed some light on future monetary policy. In the afternoon, the US will release a report on consumer prices, which, if shows a decline, will push pound to new December and yearly highs. A rise in US inflation, on the other hand, will put an end to the bullish outlook and risk appetite, which will drive GBP/USD lower.
For long positions:
Buy pound when the quote reaches 1.2286 (green line on the chart) and take profit at the price of 1.2344 (thicker green line on the chart). Growth will resume if there are very good statistics. 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 1.2229, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.2286 and 1.2344.
For short positions:
Sell pound when the quote reaches 1.2229 (red line on the chart) and take profit at the price of 1.2169. Pressure will return if reports indicate strong inflation in the US. 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 1.2286, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.2229 and 1.2169.
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.
