FX.co ★ Analysis and trading tips for GBP/USD on January 5

Analysis of transactions and tips for trading GBP/USD

The test of 1.2700, taking place during the decline of the MACD lince from zero, provoked a sell signal that led to a price decrease of over 30 pips. Purchases on the rebound from 1.2670, meanwhile, sparked a price increase of about 20 pips.

Better-than-expected PMI data from the UK triggered a rise in pound. However, quite strong interim report from ADP on the US labor market brought back the pressure, leading to a decline in GBP/USD. Today, data on the UK house price index and construction sector PMI will come out, and poor reports will likely increase the pressure, although most of the strong movement will occur in the afternoon, after the release of important statistics from the US.

For long positions:

Buy when pound hits 1.2685 (green line on the chart) and take profit at the price of 1.2739 (thicker green line on the chart). Growth will occur after good data from the UK.

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 1.2657, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2685 and 1.2739.

For short positions:

Sell when pound reaches 1.2657 (red line on the chart) and take profit at the price of 1.2622. Pressure will return in the case of data from the UK and lack of bullish activity around the daily high.

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 1.2685, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2657 and 1.2622.

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.