Analysis of transactions in the GBP / USD pair
A signal to buy emerged after GBP/USD hit 1.3165. However, the quote did not increase so much because the results of the Bank of England meeting limited the upside potential of the pair. As such, after moving up by 35 pips, the pair went through a sell-off and dipped again. Selling at 1.3125 brought more than 30 pips of profit.
Although the central bank announced a rate hike yesterday, the economic situation in the UK, especially with regards to inflation, outweighs all the advantages of the policy change. Obviously, the Bank of England made these changes not because of improved statistics, but to fight inflation. There was a rebound though in GBP/USD in the afternoon, thanks to the weaker-than-expected report on industrial production. Data on US building permits and new foundations, on the other hand, did not affect the direction of the pair.
There are no UK statistics scheduled to be released today, so there is a chance that buyers will attempt to extend the rally to weekly highs. However, it will be extremely difficult to do so because having no progress in the negotiation in Ukraine limits the upside potential of the pair. In the afternoon, the US will release reports in the secondary real estate market and leading indicators, but there is little chance that they could affect the mood of market participants.
For long positions:
Buy pound when the quote reaches 1.3183 (green line on the chart) and take profit at the price of 1.3220 (thicker green line on the chart). A rally will occur if 1.3183 is tested. 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 1.3150, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.3183 and 1.3220.
For short positions:
Sell pound when the quote reaches 1.3150 (red line on the chart) and take profit at the price of 1.3095. Pressure will return at any moment, so there is no need to hurry with long positions. 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 1.3183, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3150 and 1.3095.
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.