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Analysis of transactions and tips for trading GBP/USD
The test of 1.2174, coinciding with the downward movement of the MACD line from zero, prompted a sell signal that led to a decline towards 1.2112.
Data on the UK house price index went unnoticed by the market, unlike the labor market report from the US, which caused an immediate drop in pound last Friday. Many traders made use of this to clear a series of stop orders, after which demand for GBP/USD returned. As for today, there will be a speech from Bank of England MPC member Catherine L. Mann, but it remains unclear whether or not it will be in favor of the pair. Nevertheless, buyers may pull off another trick by letting pound fall to its lows and then quickly rebounding from there.
For long positions:
Buy when pound hits 1.2118 (green line on the chart) and take profit at the price of 1.2276 (thicker green line on the chart). Growth will occur after traders defend the daily lows. Note that when buying, the MACD line should be above zero or just starts to rise from it.
Pound can also be bought after two consecutive price tests of 1.2174, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2218 and 1.2276.
For short positions:
Sell when pound reaches 1.2174 (red line on the chart) and take profit at the price of 1.2112. Pressure will increase especially considering the US statistics that came out on Friday, which strengthens confidence in future interest rate hikes. Note that when selling, the MACD line should be below zero or drops down from it.
Pound can also be sold after two consecutive price tests of 1.2218, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2174 and 1.2112.
What's on the chart:
Thin green line - entry price at which you can buy GBP/USD
Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
Thin red line - entry price at which you can sell GBP/USD
Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line- it is important to be guided by overbought and oversold areas when entering the market
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.
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