Overview of trading and trading tips on GBP/USD
The 1.2497 level was challenged exactly at the moment when the MACD was just starting to move up from the zero mark, which confirmed the correct entry point for buying the pound following the newly developing trend. However, the instrument moved just 15 points up and ended the bullish leg. No other signals were formed.
Weak UK services PMI and the composite PMI did not allow the pound sterling to surpass its monthly highs yesterday. The market took no notice of another speech by Bank of England MPC member Silvana Tenreyro. Today, in the first half of the day, the focus is on the UK construction sector PMI, but I don't think it will have a serious impact on the market sentiment. So, I expect GBP/USD to remain under selling pressure. In the second half of the day, the US Labor Department will release a weekly update on initial claims for unemployment benefits and FOMC member James Bullard will also speak. Everything is clear with the weekly jobless claims, we will not learn anything new there. However, the speech of the Fed representative may cause a slight surge in market volatility.
Buy signals
Scenario #1: Today, you can buy the pound sterling when the price reaches around 1.2465 (a green line on the chart) with an upward target at 1.2492 (a thicker green line on the chart). Around 1.2492, I recommend exiting long positions and opening short ones in the opposite direction, expecting a 30-35 point move in the opposite direction from that level. Today, we predict the pound's growth only after GBP/USD consolidates at intraday highs. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting its growth from it.
Scenario #2: You can also go long on GBP/USD today in case of two consecutive price tests of 1.2441 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to a reverse market turnaround upwards. The instrument is expected to rise to the opposite levels of 1.2465 and 1.2492.
Sell signals
Scenario #1: Today, you can sell the pound only after the 1.2441 level is updated (a red line on the chart). This price action will trigger a rapid decline in the pair. The key target for sellers will be the 1.2410 level, where I recommend closing short positions and immediately opening long ones in the opposite direction, reckoning a 20-25 point move in the opposite direction from that level. GBP may remain under persistent pressure if the buyers fail to assert themselves in the first half of the day. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting its decline from it.
Scenario #2: You can also sell the sterling today in case of two consecutive price tests of 1.2465 when the MACD indicator is in the overbought area. This will limit the pair's bullish potential and cause a reverse market turnaround downward. We expect a decline to the opposite levels of 1.2441 and 1.2410.
What's on the chart
The thin green line is the key level at which you can open long positions on the EUR/USD pair.
The thick green line is the target level since the price is unlikely to move above this level.
The thin red line is the level at which you can open short positions on the EUR/USD pair.
The thick red line is the target level since the price is unlikely to move below this level.
MACD line. When entering the market, it is important to adjust trading decisions to 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 trading during sharp fluctuations in market quotes. 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.
Remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation will inevitably lead to losses for an intraday trader.
