FX.co ★ Analysis and trading tips for GBP/USD on December 15

Analysis of transactions in the GBP / USD pair

A signal to sell appeared in the market on Tuesday, but there was no downward movement even though the MACD line was below zero. The same thing happened with the buy signal that followed, as that time the MACD line had gone way above zero. No other signal appeared for the rest of the day.

GBP/USD rose yesterday because jobless claims in the UK decreased during the report week. However, average earning also declined, so the rally in the pair was not large. Then, in the afternoon, demand for dollar increased because PPI in the US jumped much stronger than expected. It also reminded the Federal Reserve System that it is time to seriously think about curtailing the volume of bond purchases.

Pound may extend its rally today because of the UK CPI report for November. A good performance will restore confidence to traders who are counting on a more aggressive policy of the Bank of England. But the highlight will be the speech of Fed Chairman Jerome Powell, which, if turns out to be dovish, will provoke another increase in GBP / USD. If the statements are hawkish, demand for dollar will surge, which will result in a fall in the pair. Data on US retail sales will also be released, but it will have little impact on the market.

For long positions:

Buy pound when the quote reaches 1.3250 (green line on the chart) and take profit at the price of 1.3287 (thicker green line on the chart). Growth will be observed if UK inflation exceeds expectations.

Before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.3225, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3250 and 1.3287.

For short positions:

Sell pound when the quote reaches 1.3225 (red line on the chart) and take profit at the price of 1.3176. Weak data on the UK economy and dovish statements from the Federal Reserve will bring more pressure on GBP / USD.

Before selling, make sure that the MACD line is below zero, or is starting to move down from it. Pound can also be sold at 1.3250, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3225 and 1.3176.

What's on the chart:

The thin green line is the key level at which you can place long positions in the GBP/USD pair.

The thick green line is the target price, since the quote is unlikely to move above this level.

The thin red line is the level at which you can place short positions in the GBP/USD pair.

The thick red line is the target price, since the quote is unlikely to move below this level.

MACD line - when entering the market, it is important to be guided by the overbought and oversold zones.

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 decisions based on the current market situation is an inherently losing strategy for an intraday trader.