FX.co ★ Analysis and trading tips for GBP/USD on May 2 (US session)

There was a sell-off in GBP/USD even though data on manufacturing PMI were fairly good. The test of 1.2489 coincided with the moment the MACD started moving downward from zero, which was a pretty good reason to sell. This resulted in a decrease of over 30 pips. However, the pair did not manage to reach the target level of 1.2450.

Pound's decline may continue if the US releases very good data on manufacturing orders. The report on the level of vacancies and labor force turnover from the Bureau of Labor Statistics will not be of great interest to the market.

For long positions:

Buy pound when the quote reaches 1.2500 (green line on the chart) and take profit at the price of 1.2545 (thicker green line on the chart). Weak US statistics will push pound to spike upwards, However, before buying, make sure that the MACD line is above zero and is starting to rise from it. Pound can also be bought after the level of 1.2457 is tested twice, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2500 and 1.2545

For short positions:

Sell pound when the quote reaches 1.2457 (red line on the chart) and take profit at the price of 1.2413. Pressure will return if the upcoming US data exceeds expectations. However, before selling, make sure that the MACD line is below zero and is starting to drop down from it. Pound can also be sold after the level of 1.2500 is tested twice, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2457 and 1.2413

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.