Analysis of transactions in the GBP / USD pair
The pair tested 1.2133 when the MACD line was quite far from zero, so the upside potential was limited. Sometime later, another test took place, but this time at the level of 1.2097. It led to a price decrease of around 40 pips as it coincided with the MACD line starting to move below zero, which was a very good reason to sell.
GBP/USD fell on Thursday due to very weak UK GDP data and strong US Q3 GDP report. But this morning, there may be a slight correction in the pair as there are no UK statistics scheduled to be released. US data on income, expenses and personal consumption, which are due out in the afternoon, may give a boost to dollar, but only if the figures show a significant increase. A fall in the primary market housing sales may undermine the bullish momentum as poor real estate market statistics are a harbinger of recession. And if the pair fails to break below yesterday's low, there will be a larger upward correction later in the week.
For long positions:
Buy pound when the quote reaches 1.2057 (green line on the chart) and take profit at the price of 1.2102 (thicker green line on the chart). Growth will occur if many traders close their short positions. 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 1.2021, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.2057 and 1.2102.
For short positions:
Sell pound when the quote reaches 1.2021 (red line on the chart) and take profit at the price of 1.1974. Pressure will return if the US reports strong statistics. 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 1.2057, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.2021 and 1.1974.
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.
