Trading recommendations
The pound/dollar pair tested 1.2083 when the MACD indicator was far from zero. This limited the pair's downward potential. That is why I did not open sell orders since the volatility was very low.
Today, in the first part of the day, the UK will not publish any macroeconomic report. That is why the pair is unlikely to go on falling. The fact is that the main trend is bullish and traders are likely to buy the asset in case of a decline. I suppose that the situation we saw on Friday may repeat today and the pair may trade sideways. In the second part of the day, some representatives of the Fed will provide speeches. However, they will hardly say something new as everything was said last week. What is more, the FOMC meeting minutes proved the regulator's intention to switch to a less aggressive approach as early as December. This is bad for the US dollar and good for the pound sterling. The news may also encourage traders to buy the asset.
Signals to buy GBP/USD
Scenario 1: today, traders may buy the pound sterling once the price hits 1.2093 (a green line) with the target at 1.2143 (a thicker green line). When the price reaches 1.2146, traders are better to leave the market and open sell orders, expecting a decline of 30-35 pips. The pound sterling will show a rise only after an unsuccessful attempt to return to daily lows. Notably, before opening buy orders, make sure that the MACD indicator is above zero and is starting to climb from this level.
Scenario 2: today, traders may also go long if the price touches 1.2050. At that moment, the MACD indicator should be in the oversold area, which will limit the pair's downward potential and lead to the price reversal. In this case, the pair may increase to 1.2093 and 1.2146.
Signals to sell GBP/USD:
Scenario 1: today, traders can sell the pound sterling once the price goes below 1.2050 (a red line). In this case, the price may show a rapid drop. The key target is located at 1.2001, where it is recommended to leave the market and open orders in the opposite direction. The pair may rise by 20-25 pips. If buyers fail to be active at 1.2093, pressure on the pound sterling will increase. Notably, before opening sell orders, make sure that the MACD indicator is below zero and is starting to drop from it.
Scenario 2: today, traders may also go short if the price touches 1.2093. At that moment, the MACD indicator should be in the overbought area, which will cap the upward potential of the pair and cause the market reversal. The price may slide to 1.2050 and 1.2001.
What we see on the trading chart:
A thin green line is a key level at which you can place long positions on EUR/USD.
A thick green line is the target price since the quote is unlikely to move above it.
A thin red line is a level at which you can place short positions on EUR/USD.
A thick red line is the target price since the quote is unlikely to move below it.
A 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 to enter the market. Before the release of important reports, it is better to stay out of the market to avoid sharp fluctuations in the price. If you decide to trade during the news release, place stop orders to minimize losses. Without stop orders, you can lose the entire deposit, especially if you do not use money management and trade large volumes.
Notably, for successful trading, it is necessary to have a clear trading plan. Rash trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.
