Analysis of transactions and tips for trading GBP/USD
Pound tested 1.2374, but the MACD line was already far from zero, so the downside potential was limited. Sometime later, another test took place - at 1.2405 - but the MACD line was also away from zero that time, so there was no large movement. No other signals appeared for the rest of the day.
UK statistics that are published this morning are unlikely to support pound as the data on M4 money supply and approved mortgage applications do not play a big role for traders. Thus, expect continued pressure on GBP/USD, especially ahead of the monetary policy meeting of the Federal Reserve. In the afternoon, the US will release a report on consumer confidence, which, if shows an increase, could prompt another decline in the pair. The Chicago PMI report, on the other hand, will be of little interest to the market.
For long positions:
Buy pound when the quote reaches 1.2369 (green line on the chart) and take profit at the price of 1.2416 (thicker green line on the chart). Growth could occur if the level of 1.2330 is not broken. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2330, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2369 and 1.2416
For short positions:
Sell pound when the quote reaches 1.2330 (red line on the chart) and take profit at the price of 1.2290. Pressure will remain if sellers manage to break the support level of 1.2330 before the Fed and Bank of England meeting. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2369, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2330 and 1.2290.
What's on the chart:
The thin green line is the key level at which you can place long positions in the GBP/USD pair.
The thick green line is the target price, since the quote is unlikely to move above this level.
The thin red line is the level at which you can place short positions in the GBP/USD pair.
The thick red line is the target price, since the quote is unlikely to move below this level.
MACD line - when entering the market, it is important to be guided by the overbought and oversold zones.
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.
