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There was a signal to sell in GBP / USD on Thursday, but the decrease was limited because the MACD line was far away from zero. Then, after that, a buy signal appeared, and it provoked a 15-pip increase because traders were able to safely take long positions, thanks to the MACD line being at the oversold area. Towards the middle of the day, another signal to sell emerged, and this time it led to a 15-pip decline as the MACD line was moving down from zero.
Pound declined yesterday because the latest data on the US labor market brought demand back to dollar. But this morning the situation may turn around if the reports on UK manufacturing, service and composite PMI come out better than anticipated.
US will release similar reports in the afternoon, and like pound, it will affect demand for dollar. There will also be a conference featuring Fed chairman Jerome Powell, and his statements could lead to a surge in volatility.
For long positions:
Open a long position when pound reaches 1.3809 (green line on the chart) and take profit at 1.3848 (thicker green line on the chart). Price will jump if UK releases strong macroeconomic statistics.
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 1.3785, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3809 and 1.3848.
For short positions:
Open a short position when pound reaches 1.3785 (red line on the chart) and take profit at 1.3744. Pressure will return if UK releases weak statistics.
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 1.3809, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3785 and 1.3744.
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.
InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.
