Analysis of transactions and tips for trading GBP/USD
The test of 1.2052 occurred when the MACD line was already far from zero, so the upside potential was limited. Sometime later, there was another test, but this time the market signal was to sell and there was also no strong price decrease. The test of 1.2017 in the afternoon happened when the MACD line was far from zero as well, so the downward move was rather limited.
UK's retail sales report is coming out this morning. Its rise will lead to an increase in demand for pound, which will certainly prompt an upward correction later in the week. But if the data disappoints, another fall is inevitable.
In the afternoon, besides the speeches of FOMC members Michelle Bowman and Thomas Barkin, there is nothing that will help dollar, so expect an uptrend in GBP/USD. The import price index and leading indicators are of no interest.
For long positions:
Buy pound when the quote reaches 1.1960 (green line on the chart) and take profit at the price of 1.2022 (thicker green line on the chart). Growth will be possible, and this will continue the correction. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.1930, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1960 and 1.2022.
For short positions:
Sell pound when the quote reaches 1.1930 (red line on the chart) and take profit at the price of 1.1875. Pressure will return if economic data in the UK are weaker than expected. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.1960, but the MACD line should be in the overbought area as only by that will the market reverse to 1.1930 and 1.1875.
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.