The test of 1.2870, coinciding with the drop of the MACD line from zero, prompted a sell signal that led to a price decrease of around 40 pips.
Positive data on UK retail sales led to a rise in EUR/USD, bringing sellers back into the market. They took advantage of the correction to start a sell-off in the pair.
The empty macroeconomic calendar in the US gives traders the chance to recover pound's decline and update the daily highs.
For long positions:
Buy when pound hits 1.2874 (green line on the chart) and take profit at the price of 1.2916 (thicker green line on the chart). Growth may occur, but it will only be a part of a correction after the mid-week decline.
When buying, ensure that the MACD line lies above zero or rises from it. Pound can also be bought after two consecutive price tests of 1.2844, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2874 and 1.2916.
For short positions:
Sell when pound reaches 1.2844 (red line on the chart) and take profit at the price of 1.2804. Pressure may return at any moment, but the lack of data may keep volatility low.
When selling, 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 1.2874, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2844 and 1.2804.
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.
