Analysis of transactions in the GBP / USD pair
GBP / USD fell strongly on Friday, which opened a good opportunity to take short positions. Sadly, the MACD line was far from zero, so investors had no choice but to ignore the signal.
Today though it is likely that the pair will drop in price as there are not much statistics expected to be published. Thus, it would be best to trade along the trend and bet on a decline.
By afternoon, the market should become calm because the absence of US statistics will force traders to take a wait and see attitude. Data on the housing market will be published, but it is unlikely to affect dollar significantly, although it may partially support it.
For long positions:
Open a long position when pound reaches 1.3730 (green line on the chart), and then take profit at the level of 1.3763 (thicker green line on the chart). But it is unlikely to see a huge growth today since there was a massive sell-off during the Asian session. In any case, before buying, make sure that the MACD line is above zero, or is starting to rise from it.
It is also possible to buy at 1.3701, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3730 and 1.3763.
For short positions:
Open a short position when pound reaches 1.3701 (red line on the chart), and then take profit at the level of 1.3661. The pair may continue the downward trend that started last week. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.
The pair could also be sold at 11.3730, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3701 and 1.3661.
What's on the chart:
The thin green line is the key level at which you can place long positions in the GBP/USD pair.
The thick green line is the target price, since the quote is unlikely to move above this level.
The thin red line is the level at which you can place short positions in the GBP/USD pair.
The thick red line is the target price, since the quote is unlikely to move below this level.
MACD line - when entering the market, it is important to be guided by the overbought and oversold zones.
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 decisions based on the current market situation is an inherently losing strategy for an intraday trader.