01.03.202210:58 Forex Analysis & Reviews: Analysis and trading tips for GBP/USD on March 1

Analysis of transactions in the GBP / USD pair

A signal to sell emerged after GBP/USD hit 1.3345. However, there was no decrease because the MACD line being far from zero limited the downside potential of the pair. Some time later, on the same level, a signal to buy was formed. Since the indicator was already recovering from the oversold area, the pair rose by more than 40 pips.

The buy signal at 1.3386 failed because the MACD line was far from zero at that time.

US data on foreign trade balance and wholesale sales were ignored by markets yesterday, most probably because statistics are currently less important than the situation in Ukraine. But of course, traders should still pay attention to the upcoming report on business activity in the UK manufacturing sector, as well as the speeches of Bank of England MPC members Michael Saunders and Catherine L. Mann. Their statements could contain hints on the future policy of the central bank, which could change depending on the situation in Ukraine. In the afternoon, reports on the ISM manufacturing index will be released, where a very strong growth will benefit the US dollar. The volume of spending in the construction sector, meanwhile, is not very important at the moment as much will depend on the development of the situation in Ukraine.

For long positions:

Buy pound when the quote reaches 1.3435 (green line on the chart) and take profit at the price of 1.3485 (thicker green line on the chart). A rally will occur if economic statistics in the UK exceed expectations. 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 1.3404, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.3435 and 1.3485.

For short positions:

Sell pound when the quote reaches 1.3404 (red line on the chart) and take profit at the price of 1.3355. The ongoing conflict in Ukraine is a bearish signal to risky assets, 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 1.3435, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3404 and 1.3355.

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.