Analysis of transactions and tips for trading GBP/USD
The test of 1.2076 occurred when the MACD line was in the overbought area, so there was no reason to buy. Sometime later, another test took place, but this time the signal was to sell, which led to a price decrease of about 40 pips.
Pound fell due to disappointing manufacturing data in the UK for February. It indicated that activity is decreasing, albeit not as much as the month before. The reports on approved mortgage applications and volume of net loans to individuals were ignored.
Today, apart from a speech from Bank of England member Huw Pill, there is nothing to help pound recover from yesterday's losses. Thus, pressure is likely to continue in the pair. In the afternoon, the US will release data on jobless claims, followed by a change in the labor force productivity. Both are unlikely to have much impact on the market.
For long positions:
Buy pound when the quote reaches 1.2019 (green line on the chart) and take profit at the price of 1.2067 (thicker green line on the chart). Growth is possible; however, it will only be a correction. 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 1.1971, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2019 and 1.2067.
For short positions:
Sell pound when the quote reaches 1.1971 (red line on the chart) and take profit at the price of 1.1925. Pressure will return if there are no buyers 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 1.2019, but the MACD line should be in the overbought area as only by that will the market reverse to 1.1971 and 1.1925.
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.
