FX.co ★ Analysis and trading tips for GBP/USD on March 6

Analysis of transactions and tips for trading GBP/USD

Further growth became limited as the test of 1.2690 took place at a time when the MACD line rose sharply from zero. Later, a test of 1.2730 occurred, and this provoked a sell signal, which led to a price decrease of over 40 pips.

Pound faced serious problems amid a decrease in Service PMI in the UK. However, weak statistics from the US led to a spike in GBP/USD in the afternoon. Volatility may surge today after the release of PMI data on the UK's construction sector. A report on the yearly budget will also come out. They may cause a sharp decline in the pair if the data disappoints.

For long positions:

Buy when pound hits 1.2716 (green line on the chart) and take profit at the price of 1.2745 (thicker green line on the chart). Growth will occur in continuation of the upward trend, especially after strong activity 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 1.2696, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2716 and 1.2745.

For short positions:

Sell when pound reaches 1.2696 (red line on the chart) and take profit at the price of 1.2671. Pressure will persist after an unsuccessful attempt to break through the local 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 1.2716, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2696 and 1.2671.

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.