FX.co ★ Analysis and trading tips for GBP/USD on November 2

Analysis of transactions in the GBP / USD pair

The test of 1.1556 happened when the MACD line was far above zero, which limited the upside potential of the pair, especially after the weak UK data. In the afternoon, purchases on a rebound from 1.1470 brought losses.

The Nationwide house price index and manufacturing PMI in the UK pushed GBP/USD down on Tuesday, but buyers managed to even out the situation before the day ended.

There is nothing scheduled to be released in the UK today, so traders will focus on the US data in the afternoon and the Fed's latest decision on monetary policy. Many expect the rates to hit 4.0%, but more important is what course the central bank will take. If it does not change and remains super-aggressive, dollar will strengthen further.

For long positions:

Buy pound when the quote reaches 1.1524 (green line on the chart) and take profit at the price of 1.1600 (thicker green line on the chart). Growth will occur if the Fed changes its course on monetary policy into a softer one. But remember that when buying, the MACD line should be above zero or is starting to rise from it.

Pound can also be bought at 1.1462, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1524 and 1.1600.

For short positions:

Sell pound when the quote reaches 1.1462 (red line on the chart) and take profit at the price of 1.1391. Pressure will return if the Fed continues its aggressive policy. But 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 1.1524, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1462 and 1.1391.

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.