FX.co ★ Analysis and trading tips for GBP/USD on June 6 (US session)

The first test of 1.2405, coinciding with the significant decline of the MACD line from zero, limited the downward potential of the pair. Meanwhile, selling on the rebound from 1.2455 resulted in losses.

Pound bounced back from the weekly lows amid growing concerns that the Bank of England will continue to raise interest rates. Upcoming data on the US trade balance and volume of imports and exports could not affect the market, so there may be another upward surge in GBP/USD.

For long positions:

Buy when pound hits 1.2474 (green line on the chart) and take profit at the price of 1.2500 (thicker green line on the chart). Growth could occur after the release of US data. However, before buying, traders should make sure that the MACD line lies above zero or rises from it. Pound can also be bought after two consecutive price tests of 1.2449, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2474 and 1.2500.

For short positions:

Sell when pound reaches 1.2449 (red line on the chart) and take profit at the price of 1.2415. No signs of looming pressure could be seen in the pair. However, traders could still sell especially if the MACD line lies below zero or drops down from it. Pound can also be sold after two consecutive price tests of 1.2474, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2449 and 1.2415.

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.