Analysis of transactions and tips for trading GBP/USD
Further decline became limited because the first test of 1.2548, which occurred on Tuesday afternoon, coincided with the sharp drop of the MACD line away from zero. The second test, on the other hand, occurred during the recovery of the MACD from its lows, leading to a rise in the pair by more than 30 points.
Weak PMI data in the UK increased pressure on pound, leading to the update of monthly lows. Large players took advantage of this moment to quickly sell before today's speech of Bank of England Governor Andrew Bailey, as he may discuss further interest rate hikes, which could lead to an upward correction of the pair in the morning.
For long positions:
Buy when pound hits 1.2588 (green line on the chart) and take profit at the price of 1.2639 (thicker green line on the chart). Growth may occur after Bailey's speech. However, when buying, ensure that the MACD line lies above zero or just starts to rise from it.
Pound can also be bought after two consecutive price tests of 1.2555, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2588 and 1.2639.
For short positions:
Sell when pound reaches 1.2555 (red line on the chart) and take profit at the price of 1.2493. Pressure will increase if Bailey takes a softer stance on monetary policy. However, when selling, ensure that the MACD line lies below zero or drops down from it.
Pound can also be sold after two consecutive price tests of 1.2588, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2555 and 1.2493.
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.