Analysis of transactions in the GBP / USD pair
A signal to sell emerged after GBP/USD hit 1.3017. However, there was no sharp decrease because the MACD line being far from zero limited the downside potential of the pair. A similar scenario occurred when the pair reached 1.3041, but this time the signal was to buy. The MACD line being far from zero limited the upside potential of the pair. Its repeated test, coinciding with the MACD line being in the overbought area, led to a decrease of more than 35 pips.
GBP/USD fell yesterday because data from the US increased demand for dollar. In addition, the statements from James Bullard reduced risk appetite because it indicated a more aggressive attitude of the Fed towards monetary policy.
Today, there may be another decline in the pair because there are no UK statistics scheduled to be published. In the afternoon, the US will release a report on building permits and new foundations, but it is unlikely to significantly affect the market. A stable situation though will be a good sign of a healthy economy. The upcoming speech of FOMC member Charles Evans will have a positive impact on the dollar, provided that it indicates a more aggressive attitude of the Fed towards monetary policy.
For long positions:
Buy pound when the quote reaches 1.3012 (green line on the chart) and take profit at the price of 1.3055 (thicker green line on the chart). However, there is little chance for a rally today because there are no drivers for growth yet. In any case, 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 1.2980, but the MACD line should be in the oversold area as only by that will the market reverse to 1.3012 and 1.3055.
For short positions:
Sell pound when the quote reaches 1.2980 (red line on the chart) and take profit at the price of 1.2937. Pressure is likely to return on the market, and that will lead to the GBP/USD's decline below buy stop orders. However, 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 1.3012, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2980 and 1.2937.
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.