Analysis of transactions and tips for trading GBP/USD
Further growth became limited as the test of 1.2705 took place at a time when the MACD line moved upward quite strongly from zero. Then, a good market movement arose after the Fed's decision, bringing around 60 pips of profit.
The Fed said they would stick to their path of reducing interest rates even though they encountered obstacles on the way to low and stable inflation. This led to a decline in dollar and purchases of pound, completely breaking the bear market formed after the release of inflation data in the UK. The upward trend in GBP/USD will continue today as long as Manufacturing PMI, Service PMI, and Composite PMI data for the UK exceed expectations. However, statements from the Bank of England hinting at the possibility of rate cuts in the near future could lead to a massive sell-off of the pair.
For long positions:
Buy when pound hits 1.2804 (green line on the chart) and take profit at the price of 1.2865 (thicker green line on the chart). Growth will occur after good data and firm stance of the Bank of England.
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 1.2775, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2804 and 1.2865.
For short positions:
Sell when pound reaches 1.2775 (red line on the chart) and take profit at the price of 1.2722. Pressure will return after an unsuccessful attempt to break through the local high and news of a sharp reduction in activity in the UK.
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 1.2804, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2775 and 1.2722.
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.
