Analysis of transactions in the GBP / USD pair
Several sell signals appeared in the market on Thursday and all of them appeared at a time when the MACD line was moving below zero. This led to a 10-15 pip decline in the pair, but the last signal provoked a fall of as much as 25 pips.
There are a lot of reports scheduled to be released today, but all of them will have only a mediocre impact on the pound and are unlikely to support it even if the data turn out to be better than expected. In the afternoon, the focus will shift to US inflation, which is projected to rise even more. CPI for November is forecasted to increase to 6.8%, the highest since the early 1980s. This will force the Fed to phase out support more aggressively and raise interest rates up. There will also be a report on consumer sentiment and its growth will also lead to increased demand for dollar.
For long positions:
Buy pound when the quote reaches 1.3235 (green line on the chart) and take profit at the price of 1.3265 (thicker green line on the chart). Growth in UK GDP will provoke a rally in GBP / USD.
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 1.3211, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3235 and 1.3265.
For short positions:
Sell pound when the quote reaches 1.3211 (red line on the chart) and take profit at the price of 1.3177. Weak data on the UK economy and high US inflation will bring more pressure on GBP / USD.
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 1.3235, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3211 and 1.3177.
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.