Analysis of transactions and tips for trading GBP/USD
Pound tested 1.2495 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 40 pips. Meanwhile, selling on the rebound from 1.2495 brought 25 pips of profit.
Pound continued to rise on Thursday as data on UK GDP and industrial production turned out to be mixed. And although the weak data on US jobless claims disappointed market players, everything was compensated by the drop in the producer price index.
The economic calendar is empty today except for the speech of Bank of England MPC member Silvana Tenreyro. However, there is little chance that she will say something new, so it is likely that pound will see a downward correction at the end of the week. There are also important reports in the afternoon, such as the changes in retail trade volume and industrial production in the US. Growth in these indicators could offset the decline of dollar. The consumer sentiment index and inflation expectations from the University of Michigan will also be quite interesting.
For long positions:
Buy pound when the level of 1.2545 (green line on the chart) is reached and take profit at the price of 1.2580 (thicker green line on the chart). Growth will be seen if there is bullish activity around the monthly highs. 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 1.2580, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2545 and 1.2580.
For short positions:
Sell pound when the level of 1.2518 (red line on the chart) is reached and take profit at the price of 1.2482. Pressure will return if the quote goes beyond the daily low. 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 1.2545, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2518 and 1.2482.
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.
