FX.co ★ Analysis and trading tips for GBP/USD on February 15

Analysis of transactions and tips for trading GBP/USD

The test of 1.2159 occurred when the MACD line was just starting to move above zero, which was a pretty good signal to buy. However, there was no price increase, leading to losses. Selling on a rebound from 1.2126 also did not give the expected result.

Pound rose on Tuesday amid better-than-expected labor market report in the UK. However, CPI data in the US was also higher than expected, so dollar strengthened during the US session, causing pound to fall.

Ahead is a report on UK inflation, which will be decisive in today's movement of GBP/USD. It might push pound down even more, but if prices are better than expected, some buyers will be ready to buy during the European session without waiting for the US statistics. That being said, a rather serious volatility burst is also likely to happen in the afternoon due to the US retail sales data for January. A higher-than-forecasted figure is likely to prompt a further rise in dollar and another drop in pound. Reports on the Empire Manufacturing index and the change in industrial production will be of little interest.

For long positions:

Buy pound when the quote reaches 1.2175 (green line on the chart) and take profit at the price of 1.2230 (thicker green line on the chart). Growth will be possible if there is news of a sharp slowdown of price pressure in the UK. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2140, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2175 and 1.2230.

For short positions:

Sell pound when the quote reaches 1.2140 (red line on the chart) and take profit at the price of 1.2080. Pressure will return if the retail sales data in the US exceeds expectations. 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 1.2175, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2140 and 1.2080.

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.