Analysis of transactions in the GBP / USD pair
There was a signal to buy in GBP / USD on Wednesday morning, but the increase was limited because the MACD line was far from zero. But by afternoon the indicator moved above zero, so the bulls were able to take long positions. This provoked a 50-pip rise in the pair.
Strong UK inflation data boosted the pound yesterday because it increased the chance for a rate hike later this year. And since a new upward trend was formed, the statements from Fed representatives did not affect the rate of GBP / USD too much.
Most likely, the rally will continue as there are no UK statistics scheduled to be released today. But in the afternoon there will be reports on US manufacturing index and jobless claims, although it will not shake the markets much. FOMC members Raphael Bostic, John Williams and Mary Daly will also give out speeches later.
For long positions:
Open a long position when pound reaches 1.3502 (green line on the chart) and take profit at 1.3556 (thicker green line on the chart). The rally will continue the observed upward trend in the market.
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 1.3474, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3502 and 1.3556.
For short positions:
Sell pound when the quote reaches 1.3474 (red line on the chart) and take profit at the price of 1.3407. The decline will continue if the Fed says hawkish statements on US monetary policy.
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 1.3502, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3474 and 1.3407.
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.