Analysis of transactions and tips for trading GBP/USD
The upside potential was limited because the test of 1.2063 occurred when the MACD line was already far from zero. On the second attempt, the MACD line was under zero, which was a good signal to sell. This resulted in a price decrease of about 40 pips.
Pound was already under pressure from the speech of Bank of England governor Andrew Bailey last Friday. Most likely, this downward move will continue today as there are no important statistics scheduled to be released in the UK. The risk of further rate hikes in the US will also provide support for dollar, as will the upcoming speech of FOMC member Michelle Bowman, who may once again stress that the Fed is not going to cut interest rates this year. All that will keep GBP/USD down early this week.
For long positions:
Buy pound when the quote reaches 1.2075 (green line on the chart) and take profit at the price of 1.2126 (thicker green line on the chart). Growth will be possible in the morning. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2036, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2075 and 1.2126.
For short positions:
Sell pound when the quote reaches 1.2036 (red line on the chart) and take profit at the price of 1.1992. Pressure will return if there is no activity around the daily high. 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 1.2075, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2036 and 1.1992.
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.
