Analysis of transactions and tips for trading GBP/USD
The test of 1.2027 occurred when the MACD line was just starting to move below zero, which was a pretty good signal to sell. However, the decline was only brief as the market lacked the volatility to make strong movements.
GBP/USD remained in a sideways trend as the Rightmove housing price index report missed the market.
There will be PMI reports for the UK today, in which poor figures will prompt another decline in the pound. Data on industrial orders, meanwhile, will be ignored. In the afternoon, a similar PMI report is expected for the US, but the figures are unlikely to be as strong as in the UK. Signals of weakening activity will certainly hurt dollar, which will allow pound to rally. A strong reading, on the other hand, will lead to a sharp decline in GBP/USD during the US session.
For long positions:
Buy pound when the quote reaches 1.2051 (green line on the chart) and take profit at the price of 1.2093 (thicker green line on the chart). Growth will be possible if PMI data in the UK exceeds expectations. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2013, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2051 and 1.2093.
For short positions:
Sell pound when the quote reaches 1.2013 (red line on the chart) and take profit at the price of 1.1966. 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 1.2051, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2013 and 1.1966.
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.