FX.co ★ Analysis and trading tips for GBP/USD on January 13

Analysis of transactions in the GBP / USD pair

Pound tested 1.2169 three times on Thursday. The first one was when the MACD line was quite far from zero, which limited the upside potential. The second one was when the MACD line was already recovering from the overbought area, which seemed to be a good signal to sell. It resulted in a price decrease of about 40 pips. The last test came when the MACD line was moving above zero, which, accompanied by the latest US inflation report, was an excellent signal to buy. It led to a rise of about 70 pips.

A number of UK reports are due out today, which could lead to a spike in volatility. The first thing to look out for is the GDP change in relation to the previous quarter, which is expected to decline. This will put even more pressure on the pound. The manufacturing and industrial production reports are also projected to be pretty poor, while the trade balance figures will be ignored. If the pound manages to stay afloat despite all the negativity, there will be another attempt to move upwards, especially since US reports in the afternoon, namely the consumer sentiment index from the University of Michigan and inflation expectations, are likely to weaken demand for the dollar . The import and export price index data is likely to be ignored.

For long positions:

Buy pound when the quote reaches 1.2206 (green line on the chart) and take profit at the price of 1.2257 (thicker green line on the chart). Growth will occur if the upcoming UK data is good. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.2163, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2206 and 1.2257.

For short positions:

Sell pound when the quote reaches 1.2163 (red line on the chart) and take profit at the price of 1.2104. Pressure will increase if the UK reports weaker-than-expected economic statistics. But make sure that when selling, the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2206, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.2163 and 1.2104.

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.