Analysis of transactions in the GBP / USD pair
A signal to buy emerged after GBP/USD hit 1.3110. However, there was no sharp increase even though the MACD line was starting to move above zero. The same thing happened during the test of 1.3070, but this time the reason is that the MACD line was far from zero. It was only at the test of 1.3110 that the pair moved because it coincided with the indicator moving above zero. It prompted a 50-pip rally in GBP/USD. Selling at 1.3158 also brought about 25 pips of profit.
There was a very active struggle between buyers and sellers yesterday because the former took advantage of the good news following the results of the negotiations in Ukraine, while the latter took advantage of the soft policy of the Bank of England and the depressing prospects for economic growth in the UK. As a result, trading remained within the sideways channel.
In terms of statistics, the report on the UK money supply and approved applications for a mortgage loan did not lead to changes in the market. But the better-than-expected data on US consumer confidence prompted a correction in EUR/USD in the afternoon.
There are no important statistics on the UK today, but there will be a speech from Bank of England Deputy Governor Ben Broadbent. Most likely, he will remind the markets of the central bank's soft and wait-and-see position on interest rates, which is a bad signal for the pound. In the afternoon, the US will release reports on GDP and the labor market, followed by a speech from Fed representative Esther George. If there are no serious changes in GDP, the deterioration of the situation in the US labor market may lead to a weakening of the dollar.
For long positions:
Buy pound when the quote reaches 1.3135 (green line on the chart) and take profit at the price of 1.3181 (thicker green line on the chart). A rally is possible today, especially amid progress in the negotiations in Ukraine and easing of geopolitical tensions. However, when buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.3098, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.3135 and 1.3181.
For short positions:
Sell pound when the quote reaches 1.3098 (red line on the chart) and take profit at the price of 1.3052. Pressure is likely to continue as the outlook for the UK is getting gloomier every day. 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 1.3135, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3098 and 1.3052.
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.