Analysis of transactions in the GBP / USD pair
The pair tested 1.2189 just when the MACD line was moving above zero, which was a good reason to buy. However, there was no price increase that time, and it was only on the second attempt that the quote rose by over 40 pips. Even so, the pair did not reach the target level of 1.2246 and no other signals appeared for the rest of the day.
The report on UK industrial output did not affect the market yesterday and there are no data that could move pound this morning. Expect low trading volume to persist, which is likely to lead to another spike in volatility, similar to yesterday. But in the afternoon, there will be important reports from the US, such as the number of issued building permits and the volume of new home constructions. A decline in the figures will signal the onset of recession, which many expect in 2023. This will put pressure in dollar and lead to an upward spurt in GBP/USD.
For long positions:
Buy pound when the quote reaches 1.2155 (green line on the chart) and take profit at the price of 1.2233 (thicker green line on the chart). Growth will occur if there are weak US reports. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.2092, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.2155 and 1.2233.
For short positions:
Sell pound when the quote reaches 1.2092 (red line on the chart) and take profit at the price of 1.2025. Pressure will return if the attempt to consolidate at 1.2155 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 1.2155, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.2092 and 1.2025.
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.