Analysis of transactions and tips for trading GBP/USD
The test of 1.2119 occurred when the MACD line was far from zero, so there was no signal to buy. A similar scenario was seen at 1.2079, but this time it was the downside potential that was limited. No other signals appeared for the rest of the day.
Once again, there are no UK statistics scheduled to be released today, so market players have all the chances to continue the bullish scenario. But to do that, pound has to stay above 1.2050 for as long as possible in the morning. The speech of MPC member John Cunliffe may also support dollar; however, traders must not rely on it too much.
Quite a number of US statistics are coming out in the afternoon, but some could be bad for dollar, such as the GDP data for Q4 and the initial jobless claims, which are expected to show some growth. The speech of FOMC member Raphael Bostic is unlikely to lead to pressure on GBP/USD.
For long positions:
Buy pound when the quote reaches 1.2085 (green line on the chart) and take profit at the price of 1.2131 (thicker green line on the chart). Growth will be possible if there is a consolidation above 1.2085. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2054, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2085 and 1.2131.
For short positions:
Sell pound when the quote reaches 1.2054 (red line on the chart) and take profit at the price of 1.2016. Pressure will return if the pair does not rise in the morning. 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 1.2085, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2054 and 1.2016.
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.