Analysis of transactions in the GBP / USD pair
A signal to buy emerged after GBP/USD hit 1.3030. However, the quote did not increase because the MACD line being far from zero limited the upside potential of the pair. Some time after, it went to 1.3063, forming a signal to sell. That provoked a more than 30 pip decrease in the pair.
The employment report in the UK for January is very important as it could determine the direction of GBP/USD today. A decline in the unemployment rate will ease pressure on the market, while a change in the number of jobless claims could lead to a surge in volatility in the short term. During the US session, a report on producer prices and manufacturing will be released, but traders will most likely focus more on the upcoming Fed meeting. As such, there won't be record growth in dollar today, but the upside potential of pound will be limited
For long positions:
Buy pound when the quote reaches 1.3049 (green line on the chart) and take profit at the price of 1.3086 (thicker green line on the chart). Good data on the UK labor market may allow the bulls to update weekly highs. But 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 1.3030, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.3049 and 1.3086.
For short positions:
Sell pound when the quote reaches 1.3030 (red line on the chart) and take profit at the price of 1.2988. Poor statistics on the labor market and a sharp jump in UK jobless claims will increase pressure in the market. But 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 1.3049, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3030 and 1.2988.
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.