Analysis of transactions and tips for trading GBP/USD
The test of 1.1999 occurred when the MACD line was far from zero, so the upside potential was limited. No other market signal appeared for the rest of the day.
Good PMI data from the UK supported pound last Friday, but it was not enough. Only when the US released a similar non-manufacturing PMI report that bulls returned to the market, continuing GBP/USD's upward correction later in the week.
Today is the release of the UK's activity data on its construction section, which should help the pair continue its rally. Meanwhile, the US is scheduled to publish data on industrial orders in the afternoon, but it will be ignored by traders. This is why there is a huge chance that pound will continue rising and could possibly hit a new daily high.
For long positions:
Buy pound when the quote reaches 1.2045 (green line on the chart) and take profit at the price of 1.2084 (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 1.2020, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2045 and 1.2084.
For short positions:
Sell pound when the quote reaches 1.2020 (red line on the chart) and take profit at the price of 1.1977. 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 1.2045, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2020 and 1.1977.
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.