Analysis of transactions and tips for trading GBP/USD
Further growth became limited because the test of 1.2613 coincided with the sharp upward move of the MACD line from zero. Similarly, the upward potential halted when the pair tested 1.2652, because the MACD line also rose significantly from zero.
Dollar demand fell after statements of Fed members pointed at the easing of inflation to 2.0%. This may mean that the central bank may no longer raise interest rates in the future.
Today, there will be reports on the M4 money supply aggregate, approved mortgage loan applications, and volume of net lending to individuals in the UK. However, Bank of England Governor Andrew Bailey's speech will be much more interesting, because if he repeats exactly what he said last week, talking about keeping rates at their highs for an extended period, pound will receive support and may continue to rise. If Bailey's position unexpectedly changes, a downward correction may be seen in GBP/USD.
For long positions:
Buy when pound hits 1.2718 (green line on the chart) and take profit at the price of 1.2765 (thicker green line on the chart). Growth will occur only amid good economic statistics.
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 1.2675, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2718 and 1.2765.
For short positions:
Sell when pound reaches 1.2675 (red line on the chart) and take profit at the price of 1.2631. Pressure will return in the absence of activity at the monthly high.
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 1.2718, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2675 and 1.2631.
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.