Analysis of transactions and tips for trading GBP/USD
Pound tested 1.2063 when the MACD line was just starting to move above zero, which was a pretty good signal to buy. This resulted in an increase of about 40 pips. Meanwhile, selling on a rebound from 1.2108 took 20 pips off the market. No other signals appeared for the rest of the day.
Key event for today is the Bank of England's monetary policy report as the speeches of members will be decisive for the future direction of pound. A dovish stance will lower demand for the currency, while a hawkish stance will prompt a further increase in price. In the afternoon, the US will release its weekly report on jobless claims, but it is unlikely to lead to significant market movements. Nevertheless, good figures could have a positive effect on dollar.
For long positions:
Buy pound when the quote reaches 1.2114 (green line on the chart) and take profit at the price of 1.2160 (thicker green line on the chart). Growth will be possible if the Bank of England remains hawkish on its monetary policy. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2074, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2114 and 1.2160.
For short positions:
Sell pound when the quote reaches 1.2074 (red line on the chart) and take profit at the price of 1.2023. Pressure will return if the Bank of England announces that it is time to quit raising the rates. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2114, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2074 and 1.2023.
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.
