Analysis of transactions and tips for trading GBP/USD
The test of 1.1945 occurred when the MACD line was just starting to move up from zero, which was a signal to buy. It resulted in a price increase of over 40 pips. Meanwhile, selling on a rebound from 1.1986 did not result in a strong downward correction. The pair only fell by 10 pips, after which demand for pound returned.
Once again, there are no UK statistics scheduled to be released today, so market players will focus on the speech of Bank of England members regarding monetary policy. Most likely, pressure on pound may ease, especially after yesterday's Brexit news related to a potential new agreement on Northern Ireland.
In the afternoon, the US consumer confidence indicator should come out better than the forecasts, which will be a trigger for buying dollar in the short-term. The trade balance and Chicago PMI are likely to be ignored, as will the speech of FOMC member Austan Goolsbee.
For long positions:
Buy pound when the quote reaches 1.2060 (green line on the chart) and take profit at the price of 1.2122 (thicker green line on the chart). Growth is possible; however, it will only be an upward correction at the beginning of this week. Nevertheless, make sure that when buying, the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.2034, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2060 and 1.2122.
For short positions:
Sell pound when the quote reaches 1.2034 (red line on the chart) and take profit at the price of 1.1980. Pressure will return if the pair does not rise in the morning. 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 1.2060, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2034 and 1.1980.
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.
