FX.co ★ Analysis and trading tips for GBP/USD on December 26

Analysis of transactions and tips for trading GBP/USD

The test of 1.2692 took place during the rise of the MACD line from zero. This prompted a buy signal, which resulted in a price increase of over 30 pips.

Weak US GDP report and current account balance negatively affected pound in the morning. However, data on inflation reduction in the US exerted significant pressure on dollar, leading to a new wave of growth in the pair.

The upward trend may continue considering the empty macroeconomic calendar in the UK. But taking into account pre-New Year trading sessions, traders should be cautious when purchasing at highs. Low market volatility will keep the pair within a sideways channel.

For long positions:

Buy when pound hits 1.2713 (green line on the chart) and take profit at the price of 1.2740 (thicker green line on the chart). Growth will occur in continuation of Friday's trend.

When buying, ensure that the MACD line lies above zero or just starts to rise from it. Pound can also be bought after two consecutive price tests of 1.2690, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2713 and 1.2740.

For short positions:

Sell when pound reaches 1.2690 (red line on the chart) and take profit at the price of 1.2664. Pressure will return if no bullish activity appears around the resistance level of 1.2713.

When selling, ensure that the MACD line lies below zero or drops down from it. Pound can also be sold after two consecutive price tests of 1.2713, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2690 and 1.2664.

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.