FX.co ★ Analysis and trading tips for GBP/USD on April 20

Analysis of transactions and tips for trading GBP/USD

Pound tested 1.2429 when the MACD line had just started to climb above zero, which was a good reason to buy. As a result, the quote rose by about 35 pips. The level of 1.2479 was not reached, so it was not possible to sell the pound there.

Rally in pound extended as persistently high inflation and rising core prices are likely to force the Bank of England to continue raising interest rates.

The economic calendar is empty today, so buyers will certainly become active at the weekly highs. However, strong data on US jobless claims and volume of home sales in the secondary market could return demand for dollar, as will the Philadelphia Fed manufacturing index and speeches by FOMC members Christopher Waller and Michelle Bowman.

For long positions:

Buy pound when the level of 1.2465 (green line on the chart) is reached and take profit at the price of 1.2505 (thicker green line on the chart). Growth will be seen if the weekly high is broken. However, before buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.2420, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2465 and 1.2505.

For short positions:

Sell pound when the level of 1.2420 (red line on the chart) is reached and take profit at the price of 1.2370. Pressure will increase if there is no bullish activity this morning. However, make sure that before selling, the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2465, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2420 and 1.2370.

What's on the chart:

Thin green line - entry price at which you can buy GBP/USD

Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.

Thin red line - entry price at which you can sell GBP/USD

Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.

MACD line- it is important to be guided by overbought and oversold areas when entering the market

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.