Analysis of transactions in the GBP / USD pair
Pound fell by 35 pips on Wednesday because traders took short positions amid a signal to sell that coincided with the MACD line moving below zero. Then, after that, a buy signal appeared, and this time it coincided with the MACD line being at the oversold area. It allowed traders to take long positions, provoking an increase in the pair.
GBP/USD is likely to decline today as there are no UK statistics scheduled to be published. Moreover, in the afternoon, US will publish data on 3rd quarter GDP and jobless claims, which, if exceed expectations, will bring demand back to dollar.
For long positions:
Open a long position when pound reaches 1.3748 (green line on the chart) and take profit at 1.3793 (thicker green line on the chart). There is a high chance that the quote will rise, thanks to bulls perfectly protecting the lows.
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 1.3721, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3748 and 1.3793.
For short positions:
Open a short position when pound reaches 1.3721 (red line on the chart) and take profit at 1.3679. Strong US data will put pressure on the pair.
Before selling, make sure that the MACD line is below zero, or is starting to move down from it. Pound can also be sold at 1.3748, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3721 and 1.3679.
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.