Although the test of 1.2613 coincided with the decline of the MACD line from zero and gave off a sell signal, the pair did not show strong price decrease as the UK GDP did not disappoint.
Pressure may intensify, convincing sellers to attempt a break below the weekly lows, following strong statistics on the US economy. Market direction will depend on the data on core personal consumption expenditures, consumer spending, and personal income, as an increase in these indicators will fuel further interest rate hikes by the Fed, which will strengthen dollar demand. A similar scenario may be seen amid strong Chicago PMI data and the University of Michigan consumer sentiment index, as will high inflation expectations.
For long positions:
Buy when pound hits 1.2635 (green line on the chart) and take profit at the price of 1.2680 (thicker green line on the chart). Growth may continue in the event of poor US statistics. However, when buying, traders should make sure that the MACD line lies above zero or rises from it. Pound can also be bought after two consecutive price tests of 1.2594, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2635 and 1.2680.
For short positions:
Sell when pound reaches 1.2594 (red line on the chart) and take profit at the price of 1.2552. Pressure will increase in the case of strong statistics from the US. However, when selling, traders should make sure that the MACD line lies below zero or drops down from it. Pound can also be sold after two consecutive price tests of 1.2635, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2594 and 1.2552.
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.
