Analysis of transactions and tips for trading GBP/USD
The first test of 1.2172 coincided with the rise of the MACD line from zero, prompting a signal to buy. However, strong retail sales data in the US prevented the pair from continuing its upward correction. Later on, when sellers realized that the US data actually showed a decline, demand for pound returned. As for the second test of 1.2172, it occurred when the MACD line started to climb above zero, providing another buy signal. This led to a price increase of over 40 pips.
The released inflation data for the UK led to a small jump in GBP/USD, as the yearly data did not show a decrease, which proves to be a bad signal for the Bank of England. However, on the monthly data, prices matched forecasts, so the pair remained trading within the channel.
For long positions:
Buy when pound hits 1.2220 (green line on the chart) and take profit at the price of 1.2267 (thicker green line on the chart). Growth will occur if traders secure their positions at yesterday's high. However, when buying, the MACD line should be above zero or just starts to rise from it.
Pound can also be bought after two consecutive price tests of 1.2180, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2220 and 1.2267.
For short positions:
Sell when pound reaches 1.2180 (red line on the chart) and take profit at the price of 1.2134. Pressure will increase in the case of an unsuccessful breakdown of the daily high. However, when selling, the MACD line should be below zero or drops down from it.
Pound can also be sold after two consecutive price tests of 1.2220, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2180 and 1.2134.
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.
