FX.co ★ Analysis and trading tips for GBP/USD on June 20

Analysis of transactions in the GBP / USD pair

GBP/USD reaching 1.2278 prompted a sell signal in the market. Coincidentally, the MACD line started to move below zero, so the pair dipped by 20 pips. Shortly after that, pound jerked up and hit 1.2316, forming a buy signal. At that time, the MACD line was far from zero, limiting the upside potential of the pair. When the pair tested the level again, the MACD line was moving up, but the price increase was still limited, bringing losses. Similarly, short positions at 1.2278 and long positions at 1.2219 all ended with losses.

Dollar quickly regained all its losses last Friday after the monetary policy committee voted 6-3 to raise the bank rate by 25 basis points to 1.25%. Meanwhile, the lack of statistics in the UK did not support the pound, as did the speech of Bank of England representative Silvana Tenreyro. Dollar rose further because Fed Chairman Jerome Powell spoke a lot about more interest rate hikes in the US.

There is also no data to be released in the UK today, and the speech of MPC member Jonathan Haskel is of little interest to the market. There will also be a speech from Fed representatives in the afternoon, but the statements may not have much effect as the tone will most likely remain aggressive.

For long positions:

Buy pound when the quote reaches 1.2265 (green line on the chart) and take profit at the price of 1.2314 (thicker green line on the chart). There is a chance for a rally today, but only in the morning. Nevertheless, remember that when buying, the MACD line should be above zero, or is starting to rise from it. It is also possible to buy at 1.2220, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2265 and 1.2314.

For short positions:

Sell pound when the quote reaches 1.2220 (red line on the chart) and take profit at the price of 1.2153. Pressure will return if there are no active purchases below 1.2220. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2265, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2220 and 1.2153.

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