FX.co ★ Analysis and trading tips for GBP/USD on June 22

Analysis of transactions and tips for trading GBP/USD

Yesterday's inflation statistics in the UK led to a significant spike in volatility, but no market signals appeared in the pair because buyers took advantage of the recent decline to accumulate positions ahead of today's Bank of England monetary policy meeting.

Pound rally could continue, especially after rumors emerged that interest rates will increase by 0.5% due to the sustained high level of UK consumer price index. The market will remain bullish if the Bank of England announces its commitment to combating inflation and realistically revises rate forecasts upward.

For long positions:

Buy when pound hits 1.2765 (green line on the chart) and take profit at the price of 1.2829 (thicker green line on the chart). Growth could continue, especially after such strong inflation. However, when 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 1.2735, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2765 and 1.2829.

For short positions:

Sell when pound reaches 1.2735 (red line on the chart) and take profit at the price of 1.2698. Pressure may not return today. However, traders could still sell if the MACD line drops below zero. Pound can also be sold after two consecutive price tests of 1.2765, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2735 and 1.2698.

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.