The test of 1.2622 occurred when the MACD line was just beginning to move down from zero, which was a good reason to sell. However, no price decrease happened in the pair.
Everything depends today on the reaction to inflation, which is expected to rise. If price pressure in the US exceeded expectations, pound will drop quite significantly, but the decline will be limited due to the Bank of England meeting tomorrow. Therefore, GBP/USD may drop sharply, but it will be immediately followed by a rebound. If inflation in the US weakens, pound will rise.
For long positions:
Buy pound when the quote reaches 1.2631 (green line on the chart) and take profit at the price of 1.2675 (thicker green line on the chart). A decrease in US inflation will lead to a sharp rise in pound. However, before buying, make sure that the MACD line is above zero and is starting to rise from it. Pound can also be bought after the level of 1.2608 is tested twice, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2631 and 1.2675.
For short positions:
Sell pound when the quote reaches 1.2608 (red line on the chart) and take profit at the price of 1.2577. Pressure could return if there is a sharp rise in US inflation. However, before selling, make sure that the MACD line is below zero and is starting to drop down from it. Pound can also be sold after the level of 1.2631 is tested twice, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2608 and 1.2577.
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.
