Analysis of transactions and tips for trading GBP/USD
The pair tested 1.2328 at a time when the MACD line was just starting to move above zero, which was a good signal to buy. It resulted in a price increase of around 30 pips. However, pressure quickly returned in the pair.
The reports on the UK M4 money supply, approved mortgage applications and volume of net loans to individuals had no effect on pound yesterday. Even the minutes of the Bank of England's policy meeting was not enough for the currency to consolidate above monthly highs.
This put pressure back on GBP/USD, which may lead to a decline today, especially since there are no UK statistics scheduled to be released this morning. In the afternoon, there will be weekly jobless claims and GDP change for Q4 2022 in the US. Equally important will be speeches from FOMC member Neel Kashkari, as well as Treasury Secretary Janet Yellen, who may reveal details of a new program to support US banks. This will put pressure on dollar and return risk appetite.
For long positions:
Buy pound when the quote reaches 1.2328 (green line on the chart) and take profit at the price of 1.2358 (thicker green line on the chart). Growth is possible, but it will only be after a consolidation above 1.2330
When buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.2307, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2328 and 1.2358.
For short positions:
Sell pound when the quote reaches 1.2307 (red line on the chart) and take profit at the price of 1.2272. Pressure may intensify at any moment.
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 1.2328, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2307 and 1.2272.
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.
