FX.co ★ Analysis and trading tips for GBP/USD on April 1

Analysis of transactions in the GBP / USD pair

A signal to sell emerged after GBP/USD hit 1.3124. However, there was no sharp decrease even though the MACD line was just starting to move down from zero. The movement amounted to only 12 pips. Some time after, the pair reached 1.3152, where a signal to buy appeared. But since the MACD line was already far away from zero, the upside potential was limited.

Yesterday's report on UK GDP instilled some confidence in pound buyers, but did not help them break through the weekly highs. This is because the deplorable state of UK households, together with high inflation, does not allow investors to see good prospects for both pound and the UK economy for now.

A number of reports are coming out today, one of which is the PMI data for the manufacturing sector in the UK, which may once again spoil the mood of investors. If the figure turns out to be worse than forecasts, pressure on GBP/USD will seriously increase. In the afternoon, the US will release data on the labor market, which could further strengthen demand for the dollar and bring the pair down to weekly lows.

For long positions:

Buy pound when the quote reaches 1.3144 (green line on the chart) and take profit at the price of 1.3196 (thicker green line on the chart). However, a further increase is unlikely today, especially after the release of weak statistics on the UK. Nevertheless, when buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.3117, but the MACD line should be in the oversold area as only by that will the market reverse to 1.3144 and 1.3196.

For short positions:

Sell pound when the quote reaches 1.3117 (red line on the chart) and take profit at the price of 1.3070. Pressure is likely to continue as the outlook for the UK is getting gloomier every day. 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 1.3144, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3117 and 1.3070.

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.