Analysis of transactions and tips for trading GBP/USD
The test of 1.2635 coincided with the time that the MACD line was already far from zero, so the upward potential was limited. Sometime later, there was another test, but this time it was at 1.2611 and the MACD line had just begun to move down from zero. Unfortunately, there was also no significant drop at the first attempt. The pair fell by 25 pips only at the second test of the price level.
The economic calendar in the UK is empty again today, so traders should expect to see another upward surge in the area of monthly highs. However, the rise will be limited by data from the US, as further growth in inflation is likely to prompt an increase in dollar demand which, in turn, will lead to a fall in GBP/USD. If inflationary pressure eases, especially the core one, pound will strengthen. The US Budget Execution Report will not be of great interest.
For long positions:
Buy pound when the level of 1.2642 (green line on the chart) is reached and take profit at the price of 1.2667 (thicker green line on the chart). Growth could occur in case of very weak inflation data in the US. 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 1.2622, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2642 and 1.2667.
For short positions:
Sell pound when the level of 1.2622 (red line on the chart) is reached and take profit at the price of 1.2585. Pressure will return amid lack of activity at daily highs and strong US statistics. However, before selling, make sure that 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 1.2642, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2622 and 1.2585.
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.
