Analysis of transactions in the GBP / USD pair
Pound tested 1.1488 at a time when the MACD line was far from zero, which limited the downside potential of the pair. Sometime later, it tested 1.1533, but this time the signal that emerged was to buy, which also failed. Only the sell-offs around 1.1582 managed to bring profit to the market.
GBP/USD rose on Wednesday morning as the report on the UK consumer price index was slightly better than expected. However, market balance returned in the afternoon amid US data on producer prices.
Today, a report on US retail sales will be released, which, if shows a decrease, will ease inflationary pressures, but also lead to a slowdown in economic growth. If the data is better than expected, demand for dollar will continue to rise. There will also be a weekly report on jobless claims and manufacturing indices, which could force the pair to decline further.
For long positions:
Buy pound when the quote reaches 1.1533 (green line on the chart) and take profit at the price of 1.1582 (thicker green line on the chart). Although there is little chance for growth today, traders can still open long positions when the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.1495, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1533 and 1.1582.
For short positions:
Sell pound when the quote reaches 1.1495 (red line on the chart) and take profit at the price of 1.1442. Pressure will return if statistics in the US are better than expected. But 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 1.1533; however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1495 and 1.1442.
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.