logo

FX.co ★ Analysis and trading tips for GBP/USD on May 3 (US session)

Analysis and trading tips for GBP/USD on May 3 (US session)

The economic calendar in the UK being empty today allowed traders to partially recover yesterday's losses. However, the test of 1.2505 occurred when the MACD line was already far from zero, so the upward potential was limited.

Analysis and trading tips for GBP/USD on May 3 (US session)

Just ahead is the release of the Fed's monetary policy decision, which will be decisive to the direction of pound for the near future. The end of the rate hike cycle will lead to a sharp rise to new monthly highs, while a further increase will prompt another decline in the currency. Data from the ISM and the ADP regarding the US labor market could also put pressure on GBP/USD.

For long positions:

Buy pound when the quote reaches 1.2523 (green line on the chart) and take profit at the price of 1.2594 (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 1.2482 is tested twice, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2523 and 1.2594.

For short positions:

Sell pound when the quote reaches 1.2482 (red line on the chart) and take profit at the price of 1.2413. Pressure will return if the Federal Reserve maintains its aggressive policy. 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 1.2523 is tested twice, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2482 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.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
Go to the articles list Go to this author's articles Open trading account