Analysis of transactions and trading tips on GBP/USD
The decline halted, as the test of 1.2623 took place at a time when the MACD line moved downward quite strongly from zero. Fairly good manufacturing activity data in the UK also limited the downward potential of the pair during the European session.
In the afternoon, data on ISM manufacturing index, as well as the reports on consumer sentiment and inflation expectations from the University of Michigan could affect market dynamics. Similarly, speeches by FOMC members Raphael Bostic, Christopher Waller, and Mary Daly may push dollar up, provided that they keep their firm stance on monetary policy.
For long positions:
Buy when pound hits 1.2656 (green line on the chart) and take profit at the price of 1.2695 (thicker green line on the chart). Growth will occur after weak data from the US. This may lead to an update of the daily high.
When buying, ensure that the MACD line lies above zero or rises from it. Pound can also be bought after two consecutive price tests of 1.2631, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.2656 and 1.2695.
For short positions:
Sell when pound reaches 1.2631 (red line on the chart) and take profit at the price of 1.2590. Pressure will increase in the case of strong US statistics.
When selling, make sure that the MACD line lies below zero or drops down from it. Pound can also be sold after two consecutive price tests of 1.2656, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2631 and 1.2590.
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.