Analysis of transactions and tips on trading the pound
The test of 1.2652 in the afternoon came at a time when the MACD indicator was just starting to fall from the zero mark, which confirmed the sell signal, and the pair fell to the target of 1.2622. As a result, the drop was 30 pips. The absence of UK economic reports no longer helps the GBP/USD buyers. Yesterday's US reports was the key reason why the pound fell, and the pair may continue to trade lower today. Here's why: we are expecting the summary and the minutes of the Bank of England's meeting, and hints of a soft policy will definitely exert pressure on the pound. So you should be cautious with long positions.
For long positions
Today, you can buy the pound when the price reaches 1.2628 (green line on the chart) in order to rise to the level of 1.2663 (thicker green line on the chart). I recommend leaving the market in the area of 1.2663, as well as selling the pound in the opposite direction, counting on a movement of 30-35 points in the opposite direction from the level. Today, the pound may rise, but only after the release of the minutes and if the market shows a positive reaction. When buying, make sure that the MACD line lies above zero or rises from it.
The pound can also be bought after two consecutive price tests of 1.2608, but the MACD line should be in the oversold area. This will limit the pair's bearish potential and lead to a bullish reversal. We can expect growth to the opposite levels of 1.2628 and 1.2663.
For short positions
You can sell the pound after testing the level of 1.2608 (the red line on the chart), which will lead to a rapid decline in the pair. The target will be the 1.2581 level, where I recommend leaving the market and buying the pound immediately in the opposite direction (counting on a movement of 20-25 points). You can sell the pound in support of the downtrend. When selling, make sure that the MACD line lies below the zero mark or drops down from it.
It is also possible to sell the pound today after two consecutive price tests of 1.2628, but the MACD line should be in the overbought area, as it will limit the pair's bullish potential and lead to a market reversal to 1.2608 and 1.2581.
What's on the chart:
Thin green line - entry price at which you can buy EUR/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 EUR/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.