Analysis of transactions in the GBP / USD pair
Pound tested 1.1490 at a time when the MACD line was just starting to move below zero, which was a good signal to sell. That prompted a price decrease of around 60 pips, bringing the quote to 1.1427. Then, buyers became active in the market, so the pair rose by 20 pips. No other signals appeared for the rest of the day.
Parliamentary hearings on the Bank of England's monetary policy and speech from Andrew Bailey increased pressure on pound as it became clear to traders that the pace of interest rate increases will not slow down even though the UK economy has been shrinking very much lately. As a result, pound hit new lows, which traders took advantage of to take profits. This led to dollar not growing in the afternoon despite the statements of FOMC members Loretta Mester and Lael Brainard
There are no statistics scheduled to be released in the UK today, so markets will focus on the report on US jobless claims. Fed Chairman Jerome Powell will also speak, and it is likely that it will cause a decline in GBP/USD as he may hint at further aggressive actions by the Fed. Data on the volume of consumer lending will not affect the market in any way, especially after such statistics.
For long positions:
Buy pound when the quote reaches 1.1519 (green line on the chart) and take profit at the price of 1.1574 (thicker green line on the chart). Growth will occur if risk appetite recovers after the meeting of the European Central Bank.
Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1494, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1519 and 1.1574.
For short positions:
Sell pound when the quote reaches 1.1494 (red line on the chart) and take profit at the price of 1.1427. Pressure will return after a slight upward correction and failed attempt to consolidate above 1.1519.
Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1519, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1494 and 1.1427.
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 decision based on the current market situation is an inherently losing strategy for an intraday trader.