14.10.202109:54 Forex Analysis & Reviews: Analysis and trading recommendations for GBP/USD on October 14

Analysis of transactions in the GBP / USD pair

There was a signal to buy in GBP / USD on Wednesday that coincided with the MACD line moving up from zero. This allowed bullish traders to take long positions, which provoked a 20-pip increase in the pair. Following that was another buy signal, which appeared while the MACD line was at the oversold area. It also set off an increase in the pair, but by 50 pips.

GDP growth did not affect the market much because the figure was as expected. But today pound may increase, if Bank of England members Silvana Tenreyro and Catherine Mann call for more active tightening of monetary policy. Then, in the afternoon, there will be a report on US jobless claims and PPI, followed by speeches from FOMC members Raphael Bostic and Thomas Barkin. They may discuss the ongoing rise of US inflation and advocate policy tapering, which is a bullish signal for dollar.

For long positions:

Open a long position when pound reaches 1.3672 (green line on the chart) and take profit at 1.3743 (thicker green line on the chart). Price will jump only if there is a successful breakout above the weekly highs and bullish statements from the Bank of England. But 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 1.3643, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3672 and 1.3743.

For short positions:

Open a short position when pound reaches 1.3643 (red line on the chart) and take profit at 1.3576. Pressure will return in the event of unsuccessful breakout above the weekly highs and clear hints from the Fed about a stronger tightening of policy. But 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 1.3672, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3643 and 1.3576.

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.