Analysis of transactions in the GBP / USD pair
The price test of 1.1177 occurred at the moment when the MACD line was just starting to move above zero, which was a good signal to buy. However, before the release of important reports on the state of the US labor market, there was no strong upward movement. After just a 30-pip rise, the pressure on the pair returned, forcing market players to close their purchases. No other signals appeared for the rest of the day.
GBP/USD fell on Friday as the data on UK house prices and speech of Bank of England Deputy Governor Sir David Ramsden did little to help the pound, while the sharp decline in unemployment and growth in the number of non-farm payrolls in the US prompted a strong rise in dollar. Most likely, this scenario will continue today as there are no statistics scheduled to be released in the UK. In the afternoon, Chicago Fed President Charles Evans and FOMC member Lael Brainard will speak, but there is little chance that their statements will provoke a surge in market volatility, especially since it is obvious that the dollar will continue to strengthen in the near future.
For long positions:
Buy pound when the quote reaches 1.1109 (green line on the chart) and take profit at the price of 1.1211 (thicker green line on the chart). Although there is little chance for growth today, traders can still buy as long as the MACD line is above zero or is starting to rise from it.
Pound can also be bought at 1.1052, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1109 and 1.1211.
For short positions:
Sell pound when the quote reaches 1.1052 (red line on the chart) and take profit at the price of 1.0996. Pressure will return if the attempt for price growth fails. 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 1.1109, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1052 and 1.0996.
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.