The test of 1.2612 occurred when the MACD line was just beginning to move below zero, which was a good reason to sell. Accordingly, there was a price decrease of over 30 pips.
There was not much market reaction as the decision of the Bank of England was quite expected. However, the situation could change as Bank of England Chief Andrew Bailey could say in his speech a different stance as the bank's policy could change at any moment.
Today, pressure could intensify as good reports from the US are expected. There should be a decrease in the number of initial jobless claims and an increase in the producer price Index. The speech of FOMC member Christopher Waller may also help dollar.
For long positions:
Buy pound when the quote reaches 1.2595 (green line on the chart) and take profit at the price of 1.2658 (thicker green line on the chart). Growth will be seen if Andrew Bailey says that the Bank of England will retain its tight monetary policy. 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 1.2566 is tested twice, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2595 and 1.2658.
For short positions:
Sell pound when the quote reaches 1.2566 (red line on the chart) and take profit at the price of 1.2529. Pressure could return if the Bank of England announces the easing of its monetary policy. 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 1.2595 is tested twice, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2566 and 1.2529.
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.
