Analysis of transactions in the GBP / USD pair
GBP/USD reaching 1.2532 prompted a buy signal in the market, however, having the MACD line far from zero limited the upside potential of the pair. Shortly after, it sank down to lower price levels, but then bounced back to 1.2584, where a sell signal appeared. That, in turn, prompted the pair to move by 20 pips.
Today, there are no statistics scheduled to be released in the UK, which can help pound rally. However, traders should understand that at each significant growth drives sellers to act more actively, counting on the preservation of the medium-term bearish trend.
In the afternoon, the US will release its employment data on the non-farm sector, which may further decrease dollar demand provided that the figure turns out lower than expected. There may also be a surge in volatility after the release of ISM's PMI data.
For long positions:
Buy pound when the quote reaches 1.2581 (green line on the chart) and take profit at the price of 1.2616 (thicker green line on the chart). There is a chance for a rally today, but only in the morning as the US session will most likely go on the side of sellers. Nevertheless, note that 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 1.2560, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2581 and 1.2616.
For short positions:
Sell pound when the quote reaches 1.2560 (red line on the chart) and take profit at the price of 1.2528. Pressure will return in the afternoon, but subject to strong reports on the US economy. However, note that when selling, make sure that the MACD line is below zero, or is starting to move down from it. Pound can also be sold at 1.2581, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2560 and 1.2528.
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.