Analysis of transactions in the GBP / USD pair
Pound tested 1.1227 at a time when the MACD line was just starting to move below zero, which was a god signal to sell. This resulted in a price decrease of about 40 pips and a test of the nearest support at 1.1188, where a slight upward correction occurred. No other signals appeared for the rest of the day.
Pound has lost about 500 points since the market opened due to UK finance minister Kwasi Kwarteng's vow to continue tax cuts. This raised fears that there will be another sharp rise in inflation and public debt. The upcoming speech of Bank of England member Silvana Tenreiro is also likely to aggravate the situation as she may criticize the actions of the Treasury. For this reason, it is best to bet on the further fall of pound. Fed representatives Raphael Bostic, Loretta Mester and Susan Collins will also speak, which may affect the market.
For long positions:
Buy pound when the quote reaches 1.0639 (green line on the chart) and take profit at the price of 1.0709 (thicker green line on the chart). Although growth is unlikely, traders could still buy as long as the MACD line is above zero or is starting to rise from it.
Pound can also be bought at 1.0577, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0639 and 1.0709.
For short positions:
Sell pound when the quote reaches 1.0577 (red line on the chart) and take profit at the price of 1.0478. Pressure could return at any moment, 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 1.0639, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0577 and 1.0478.
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.