Analysis of transactions and tips for trading GBP/USD
The first test of 1.2462 occurred when the MACD line was far from zero, so there was no sell signal. After a short while, another test occurred, but this time the MACD line was in the oversold area, so the signal was to buy. However, after moving up 10 pips, demand for pound decreased. It was only on the third test that a good sell-off occurred because by that time, the MACD line had just started moving down. It resulted in a drop of over 20 pips.
The economic calendar of the UK is empty today, so market players will focus on the reports due out in the US this afternoon. An increase in the PCE index could lead to a sharp rise in dollar. However, also ahead are income and spending data of the population, which could limit inflationary pressure, provided that the figures show a decrease. Such a scenario would help pound recover its losses.
Chicago PMI data and consumer sentiment from the University of Michigan will be of little interest.
For long positions:
Buy pound when the level of 1.2488 (green line on the chart) is reached and take profit at the price of 1.2520 (thicker green line on the chart). Growth will be seen if the upcoming US reports turn out to be weaker than expected. However, before buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can also be bought after two consecutive price tests of 1.2462, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2488 and 1.2520.
For short positions:
Sell pound when the level of 1.2462 (red line on the chart) is reached and take profit at the price of 1.2436. Pressure will return if there is strong data on inflation growth in the US. 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 after two consecutive price tests of 1.2488, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2462 and 1.2436.
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.
