FX.co ★ Analysis and trading tips for GBP/USD on February 7

Analysis of transactions in the GBP / USD pair

A signal to buy emerged after GBP/USD hit 1.3573, however, there was no strong movement even though the MACD line was in the oversold area. It seems that buyers did not become active despite the bullish trend. Also, strong data on the US labor market increased the pressure on the pair, prompting another sell-off in the afternoon.

The latest PMI data in the UK did not affect GBP/USD, but the statements of Bank of England Deputy Governor Ben Broadbent did. After all, an interest rate hike comes at a time when the economy is not feeling very confident.

Today, a report on UK housing prices will be released, but there is little chance that it could help pound rally. Similarly, the upcoming data on US consumer lending will not affect the market, so expect continued pressure in GBP/USD, but with a gradual return of interest from buyers.

For long positions:

Buy pound when the quote reaches 1.3539 (green line on the chart) and take profit at the price of 1.3594 (thicker green line on the chart). GBP/USD will increase as soon as the bearish correction ends. But 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 1.3511, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.3539 and 1.3594.

For short positions:

Sell pound when the quote reaches 1.3511 (red line on the chart) and take profit at the price of 1.3471. There is a high chance that the decline will continue as there are no reasons for growth yet. But 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 1.3539, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3511 and 1.3471.

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.