29.12.202110:25 Forex Analysis & Reviews: Analysis and trading tips for GBP/USD on December 29

Analysis of transactions in the GBP / USD pair

GBP / USD hit 1.3444 on Tuesday, however, the MACD line was far from zero so buying was very risky. Some time after a signal to sell emerged, but it was also risky because the MACD line was still nowhere near zero. No other signal appeared for the rest of the day.

There is no UK data to be released today, and that may aggravate pound's position, especially after yesterday's unsuccessful attempt to consolidate at new monthly highs. At the same time, in the afternoon, the US will release data on its economy, which could strengthen dollar against pound. Traders should pay particular attention to the reports on US foreign trade balance, wholesale inventories and pending home sales.

For long positions:

Buy pound when the quote reaches 1.3440 (green line on the chart) and take profit at the price of 1.3471 (thicker green line on the chart). Growth will occur if buyers manage to push the pair above 1.3471.

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 1.3426, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3440 and 1.3471.

For short positions:

Sell pound when the quote reaches 1.3426 (red line on the chart) and take profit at the price of 1.3395. Pressure will return if the pair breaks out of 1.3426. That is where a large number of buyers are located.

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 1.3440, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3426 and 1.3395.

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.