Analysis of transactions and tips for trading GBP/USD
Further decline became limited because the test of 1.2507 on Monday afternoon coincided with the sharp drop of the MACD line away from zero. A similar scenario occurred with the test of 1.2534, where the MACD line moved up quite strongly.
Pound's direction today will depend on the data on UK jobless claims and unemployment rate. Good numbers and a strong labor market will be a reason to buy, as it may influence the future decision of the Bank of England regarding interest rates. A strong surge in average earnings levels in the UK will also influence pound positively because it will give another reason to the central bank to maintain its rate hike cycle.
For long positions:
Buy when pound hits 1.2518 (green line on the chart) and take profit at the price of 1.2555 (thicker green line on the chart). Growth will occur as part of an upward correction after strong labor market data. However, when buying, ensure that the MACD line lies above zero or just starts to rise from it.
Pound can also be bought after two consecutive price tests of 1.2497, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2518 and 1.2555.
For short positions:
Sell when pound reaches 1.2497 (red line on the chart) and take profit at the price of 1.2470. Pressure may return at any moment, especially after the breakdown of the support level of 1.2490 and weak UK labor market data. However, when selling, ensure that the MACD line lies below zero or drops down from it.
Pound can also be sold after two consecutive price tests of 1.2518, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2497 and 1.2470.
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.
