Analysis of transactions and tips for trading GBP/USD
The test of 1.2622 coincided with the time that the MACD line had just started to move below zero, which was a good reason to sell. However, there was no price decrease. Sometime later, before the release of US inflation data, there was another test, but it was at the level of 1.2608. This resulted in an increase of over 60 pips.
Ahead is the release of the Bank of England's decision on interest rates, along with the monetary policy summary and speech of Andrew Bailey. His statements could weaken pound's position, unless he talks about the continuation of aggressive policy. In the afternoon, there is data on US jobless claims and producer prices, followed by a speech from FOMC member Christopher Waller. These may further strengthen dollar's position.
For long positions:
Buy pound when the level of 1.2627 (green line on the chart) is reached and take profit at the price of 1.2670 (thicker green line on the chart). Growth could occur in the case of hawkish policy by the Bank of England. However, before buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can also be bought after two consecutive price tests of 1.2612, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2627 and 1.2670.
For short positions:
Sell pound when the level of 1.2612 (red line on the chart) is reached and take profit at the price of 1.2585. Pressure will return if there is no bullish activity at the daily highs after the Bank of England's decision. However, before selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold after two consecutive price tests of 1.2627, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2612 and 1.2585.
What's on the chart:
Thin green line - entry price at which you can buy GBP/USD
Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
Thin red line - entry price at which you can sell GBP/USD
Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line- it is important to be guided by overbought and oversold areas when entering the market
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.