Analysis of transactions and tips for trading GBP/USD
The test of 1.2405 coincided with the time that the MACD line had risen significantly from zero, which limited the upward potential of the pair.
Pound rose sharply, thanks to the strong CPI data from the UK. Most likely, this momentum will continue as Bank of England Governor Andrew Bailey is expected to maintain a hawkish tone in his speech. If not, pressure will return, and there will be another test of the monthly lows. The balance of industrial orders according to the Confederation of British Industry's data will not have a significant impact on the market.
For long positions:
Buy pound when the level of 1.2466 (green line on the chart) is reached and take profit at the price of 1.2505 (thicker green line on the chart). Growth could occur after Bank of England Governor Andrew Bailey's speech. However, when buying, traders should 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 1.2429, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2466 and 1.2505.
For short positions:
Sell pound when the level of 1.2429 (red line on the chart) is reached and take profit at the price of 1.2380. Pressure will increase on dovish stance from the Bank of England. However, when selling, traders should 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 1.2466, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2429 and 1.2380.
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.
