Analysis of transactions and tips for trading GBP/USD
The test of 1.2711, coinciding with the significant rise of the MACD line from zero, limited the upward potential of the pair.
Traders will start returning to the market after yesterday's holiday in the US. In addition, a bunch of UK reports lies ahead, where figures in PMI will undoubtedly affect market direction. After all, services account for up to 70% of GDP. A decrease in the indicator will lead to a sharp drop below 50 points, causing a fairly significant decline in GBP/USD. But if the data exceeds expectations, pound may continue yesterday's rise.
For long positions:
Buy when pound hits 1.2713 (green line on the chart) and take profit at the price of 1.2744 (thicker green line on the chart). A sharp rise will occur amid strong PMI data in the UK.
When buying, make sure that the MACD line lies above zero or rises from it. Euro can also be bought after two consecutive price tests of 1.2682, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2713 and 1.2744.
For short positions:
Sell when pound reaches 1.2682 (red line on the chart) and take profit at the price of 1.2642. Pressure will increase if the data comes out weaker than expected.
When selling, traders should make sure that the MACD line lies below zero or drops down from it. Euro can also be sold after two consecutive price tests of 1.2713, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2682 and 1.2642.
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.