Analysis of transactions and tips for trading GBP/USD
Although the test of 1.2571 took place at a time when the MACD line moved upward quite strongly from zero, buying pressure persisted, as market players expected high volatility after the US data. This resulted in a price increase of over 30 pips.
At first, pound fell in price as weak GDP data for the UK confirmed the need for interest rate cuts. However, very poor retail sales in the US helped pound buyers enter the market in the afternoon, leading to an upward correction. Today, retail sales data in the UK will come out, followed by a report on fuel costs. Weak numbers will likely lead to a new round of sell-off, which will result in the further decline of the pair. The speech of Bank of England MPC member Hugh Pym may also affect market direction.
For long positions:
Buy when pound hits 1.2595 (green line on the chart) and take profit at the price of 1.2635 (thicker green line on the chart). Growth will occur after strong retail sales data in the UK.
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 1.2564, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2595 and 1.2635.
For short positions:
Sell when pound reaches 1.2564 (red line on the chart) and take profit at the price of 1.2524. Pressure will persist after weak statistics, as that will quickly restore the bearish market.
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 1.2595, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2564 and 1.2524.
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.