Analysis of transactions in the GBP / USD pair
A signal to buy emerged after GBP/USD hit 1.3135. However, there was no sharp increase because the MACD line being far from zero limited the upside potential of the pair.
Pressure returned in the afternoon, but the pair did not reach 1.3181. No other signal appeared for the rest of the day.
There were no important statistics on the UK yesterday, and the statements of Bank of England Deputy Governor Ben Broadbent did not affect market sentiment. However, the March employment data from the ADP and US GDP for the fourth quarter of 2021 led to a correction in the GBP/USD, retaining the market in a sideways channel.
A number of reports are coming out today, one of which is the changes in the volume of UK GDP for the 4th quarter of this year. Most likely, demand for pound will surge, but by the US session it will decline as sellers will act more actively. Data on expenses and income in the US will also be released, followed by a report on jobless claims. A strong performance could bring back demand for the dollar, especially since a jump in consumer spending will have a negative impact on the already excessively high inflation. The speech of FOMC member John Williams is unlikely to affect the market in the afternoon.
Considering what problems are currently observed in the UK economy and what lies ahead, betting on an increase in the current conditions is not the right decision. It is better to keep selling on GBP/USD.
For long positions:
Buy pound when the quote reaches 1.3152 (green line on the chart) and take profit at the price of 1.3196 (thicker green line on the chart). A rally is possible today, especially amid strong statistics on the UK economy. 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 1.3124, but the MACD line should be in the oversold area as only by that will the market reverse to 1.3152 and 1.3196.
For short positions:
Sell pound when the quote reaches 1.3124 (red line on the chart) and take profit at the price of 1.3070. 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 1.3152, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3124 and 1.3070.
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.