FX.co ★ Analysis and trading tips for GBP/USD on January 17

Analysis of transactions and tips for trading EUR/USD

UK is releasing important reports today that could determine the direction of the market in the short term. Of particular importance is the data on the labor market as households in the region continue to experience a cost of living crisis. A drop in average earnings, along with high inflation, could weaken demand for pound. Meanwhile, there are no important reports that could seriously affect the market in the afternoon. The Empire Manufacturing index is likely to be ignored, but a speech from FOMC member John Williams could lead to a spike in volatility and a possible fall in GBP/USD.

For long positions:

Buy pound when the quote reaches 1.2206 (green line on the chart) and take profit at the price of 1.2266 (thicker green line on the chart). Growth could occur if upcoming UK data exceeds expectations. 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 1.2153, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2206 and 1.2266.

For short positions:

Sell pound when the quote reaches 1.2153 (red line on the chart) and take profit at the price of 1.2086. Pressure will increase if upcoming UK reports are weaker than expected. 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 1.2153 and 1.2086.

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.