Analysis of transactions and tips for trading GBP/USD
The test of 1.2048 occurred when the MACD line was just starting to move above zero, which was a good reason to buy. However, the price increase was not large, so long positions ended with losses. Another test in the afternoon, this time at 1.2028 and with the MACD line moving down from zero, gave a signal to sell. This brought a 30-pip decrease. No other market signal appeared for the rest of the day.
UK house price index figures, as well as Bank of England Deputy Governor Sam Woods' speech had no impact on GBP/USD yesterday, which cannot be said about Fed Chairman Jerome Powell's hawkish speech in the afternoon.
Today, except for the statements of Bank of England member Swati Dhingra, there is nothing important scheduled in the morning, so it is unlikely that pound will see an upward correction. Similarly, in the afternoon, a number of important US reports are due to be released, which are likely to support dollar. There will also be another speech from Powell.
For long positions:
Buy pound when the quote reaches 1.1848 (green line on the chart) and take profit at the price of 1.1883 (thicker green line on the chart). Although growth is unlikely today, traders may still buy as long as the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.1818, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1848 and 1.1883.
For short positions:
Sell pound when the quote reaches 1.1818 (red line on the chart) and take profit at the price of 1.1759. Pressure will persist due to the Fed's hawkish tone yesterday. 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 1.1848, but the MACD line should be in the overbought area as only by that will the market reverse to 1.1818 and 1.1759.
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.
