Analysis of transactions in the GBP / USD pair
Pound tested 1.1494 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 15 pips, after which pressure eased and brought the pair to 1.1519. But the MACD line was already far from zero, so the upside potential was limited.
Traders relied on news from the eurozone when entering the market yesterday. However, it was only today that pound managed to get out of the sideways channel.
A survey regarding the expected inflation in the UK will be coming today, but it is unlikely to affect the direction of GBP/USD. As such, the pair will maintain an upward corrective potential that may lead to a breakdown of 1.1612. In the afternoon, there are no important statistics in the US, except for changes in the volume of stocks in wholesale warehouses. There will be presentations from FOMC members Charles Evans, Christopher Waller and Esther George, but all of them are likely to talk about further increases in interest rates.
For long positions:
Buy pound when the quote reaches 1.1612 (green line on the chart) and take profit at the price of 1.1661 (thicker green line on the chart). Growth may continue today, during the Asian session.
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 1.1576, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1612 and 1.1661.
For short positions:
Sell pound when the quote reaches 1.1576 (red line on the chart) and take profit at the price of 1.1517. Pressure will return after a failed attempt to update the weekly high.
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 1.1612, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1576 and 1.1517.
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.