Analysis of transactions in the GBP / USD pair
There were many signals to enter the market yesterday, but almost all of them had to be ignored. This is because the first two tests of 1.3305 in the morning happened when the MACD line was far from zero, which limited the movement of the pair. It was only in the afternoon that GBP / USD rose by 15 pips because by that time the MACD line was above zero.
GBP/USD fell yesterday amid disappointing data on manufacturing PMI. But the decrease did not last long as buyers immediately surged in the market. Meanwhile, the statements of Bank of England Governor Andrew Bailey did not affect pound much because it was nearly the same as his last speech.
But today the bearish momentum may resume because there are no UK statistics scheduled to be released. Most likely, the pair will hit weekly lows, but will recover by afternoon as the data on US jobless claims is unlikely to support dollar. There will also be speeches from US Treasury Secretary Janet Yellen and FOMC members Raphael Bostic and Mary Daly. They will most probably reiterate the opinion of Jerome Powell, that is, high inflation in the US is no longer temporary
For long positions:
Buy pound when the quote reaches 1.3302 (green line on the chart) and take profit at the price of 1.3344 (thicker green line on the chart). An increase will be observed if the situation around the coronavirus eases and if there is good news from the Bank of England.
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 1.3280, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3302 and 1.3344.
For short positions:
Sell pound when the quote reaches 1.3280 (red line on the chart) and take profit at the price of 1.3244. Pressure will persist if there is no good news from the UK.
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 1.3302, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3280 and 1.32644.
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.