Analysis of transactions and tips for trading GBP/USD
Pound tested 1.2419 when the MACD line was just starting to climb above zero, which was a good reason to buy. This resulted in a price increase of over 60 pips. Meanwhile, selling on the rebound from 1.2474 brought 20 pips of profit.
Since US inflation declined more than expected, pound showed significant growth against dollar yesterday. There is a chance that this momentum will continue if the data on upcoming UK reports exceed expectations. This is why markets are anticipating the release of GDP data, industrial output report, and visible trade balance in the UK. The speech of Bank of England MPC member Huw Pill could also strengthen pound. In the afternoon, there are important data from the US: the number of initial jobless claims and the producer price index, both of which may weaken dollar's position. This will lead to another surge of pound upwards.
For long positions:
Buy pound when the quote reaches 1.2495 (green line on the chart) and take profit at the price of 1.2534 (thicker green line on the chart). Growth will be seen if there is good data from the UK. However, make sure that before buying, the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.2464, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2495 and 1.2534.
For short positions:
Sell pound when the quote reaches 1.2464 (red line on the chart) and take profit at the price of 1.2415. Pressure will return if there is a lack of bullish activity at the monthly high. However, make sure that before selling, the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2495, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2464 and 1.2415.
What's on the chart:
Thin green line - entry price at which you can buy GBP/USD
Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
Thin red line - entry price at which you can sell GBP/USD
Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line- it is important to be guided by overbought and oversold areas when entering the market
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.
