Analysis of transactions and tips for trading GBP/USD
The test of 1.1971 occurred when the MACD line was far from zero, so there was no reason to sell. Sometime later, another test took place, but this time the signal was to buy as the MACD line was in the overbought area. This led to a price increase of about 35 pips.
The statements of Bank of England member Huw Pill did not help pound much, so it continued to fall on Thursday. But for today, there is a chance that the price will rise as PMI reports from the UK are ahead. Strong numbers are likely to prompt a rise in GBP/USD. But if there is no active buying in the morning, the pair will hit a new monthly low.
The afternoon will feature non-manufacturing PMI data in the US, followed by a speech from FOMC member Raphael Bostic. A decline in the former will reflect badly on the US dollar, which could lead to a stronger upward correction in the pair.
For long positions:
Buy pound when the quote reaches 1.2001 (green line on the chart) and take profit at the price of 1.2064 (thicker green line on the chart). Growth is possible; however, it will only be a correction in the morning. Nevertheless, make sure that when buying, the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.1958, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2001 and 1.2064.
For short positions:
Sell pound when the quote reaches 1.1958 (red line on the chart) and take profit at the price of 1.1909. Pressure will return if there are no buyers around the daily high. 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 1.2001, but the MACD line should be in the overbought area as only by that will the market reverse to 1.1958 and 1.1909.
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.