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Analysis of transactions in the GBP / USD pair
Market signals on Thursday said to buy GBP / USD, however, the MACD line was already in the overbought area so the increase was very limited. That is why it was more appropriate to sell, and doing so set off a 20-pip decrease in the pair. No other signal appeared for the rest of the day.
The Bank of England unexpectedly raised interest rates for the first time in three years, discarding fears of another coronavirus outbreak. This led to a sharp rise in euro and pound, which should continue today as there are no statistics scheduled to be published.
Most likely, traders will pay attention on the quarterly bulletin of the Bank of England. FOMC member Christopher Waller will also make a speech, but this will have very little impact on the market, especially since it is already clear what policy the Federal Reserve will pursue.
For long positions:
Buy pound when the quote reaches 1.3342 (green line on the chart) and take profit at the price of 1.3404 (thicker green line on the chart). Growth is expected today because of the hawkish policy of the Bank of England.
Before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.3312, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3342 and 1.3404.
For short positions:
Sell pound when the quote reaches 1.3312 (red line on the chart) and take profit at the price of 1.3261. There is a low chance though that the pair will be put under pressure today.
Before selling, make sure that the MACD line is below zero, or is starting to move down from it. Pound can also be sold at 1.3342, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3312 and 1.3261.
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 decisions based on the current market situation is an inherently losing strategy for an intraday trader.
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