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

Analysis of transactions and tips for trading GBP/USD

The test of 1.2527 coincided with the time that the MACD line had just started to move above zero, which was a good reason to buy. However, there was no price increase.

UK GDP for the first quarter and for March of this year disappointed traders, so pound slid down last Friday. Risks associated with the US debt ceiling also continue to pressure risky assets, resulting in the further growth of dollar. This clearly means that traders ignore weak US statistics, continuing to increase dollar purchases.

Today, the economic calendar of the UK is empty apart from the speech of Bank of England MPC member Huw Pill. Therefore, pound has a chance to climb up, at least until the afternoon, when the US publishes the data on the Empire Manufacturing production index. But far more interesting is the speech of FOMC members Raphael Bostic and Neel Kashkari, who may comment on the issue of the US debt ceiling, which will lead to the strengthening of dollar.

For long positions:

Buy pound when the level of 1.2478 (green line on the chart) is reached and take profit at the price of 1.2515 (thicker green line on the chart). Growth could occur and it could probably recover Friday's losses. However, before buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can also be bought after two consecutive price tests of 1.2455, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2478 and 1.2515.

For short positions:

Sell pound when the level of 1.2455 (red line on the chart) is reached and take profit at the price of 1.2416. Pressure will return in the event of dovish statements from the Bank of England. However, before selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold after two consecutive price tests of 1.2478, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2455 and 1.2416.

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.