FX.co ★ Analysis and trading tips for GBP/USD on September 14

Analysis of transactions in the GBP / USD pair

Pound tested 1.1728 at a time when the MACD line was far from zero, which limited the upside potential of the pair. Sometime later, it tested 1.1682, but this time the MACD line was just starting to move below zero, which was a good signal to sell. This resulted to a price decrease of more than more than 160 pips.

GBP/USD rose on Tuesday morning, thanks to the strong report on the UK labor market. However, the situation reversed in the afternoon, immediately after the release of latest US statistics.

Data on the UK consumer price index will be released today, and this could seriously affect the direction of pound in the market. Most likely, a further rise in inflation will result in further pressure in GBP/USD, which will lead to a new fall and return to monthly lows. The report on the UK house price index will be of little interest. In the afternoon, the US will release data on producer prices, which will likely be worse than expected. This will result in a new wave of decline in the pair.

For long positions:

Buy pound when the quote reaches 1.1533 (green line on the chart) and take profit at the price of 1.1582 (thicker green line on the chart). However, there is little chance for growth today, even in the event of a decrease in inflation in the UK.

Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1488, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1533 and 1.1582.

For short positions:

Sell pound when the quote reaches 1.1488 (red line on the chart) and take profit at the price of 1.1411. Pressure is likely to continue after the inflation reports in the UK and the US.

Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1533, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1488 and 1.1411.

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.