Analysis of transactions in the GBP / USD pair
The test of 1.2107 occurred at the time when the MACD line was just starting to move up from zero, which was a good reason to buy. It resulted in a price increase of over 40 pips. As for selling from 1.2150, it led to a 20-pip correction.
Pound remained afloat yesterday because even though manufacturing activity in the UK was weak, it was better than expected. Meanwhile, poor manufacturing data in the US caused a sharp fall in dollar, which resumed the bullish trend in GBP/USD during the US trading session.
There is nothing on the UK economy today, so expect pound to trade sideways. But by afternoon, US report on the unemployment rate and non-farm payrolls could make dollar dip, which could lead to a rise in the pair. Average hourly wage and the labor force participation rate will also have an impact on the market, as will the speech of FOMC member Charles Evans. If the labor market data comes out much better than expected, the dollar will rise, but it will not last very long.
For long positions:
Buy pound when the quote reaches 1.2248 (green line on the chart) and take profit at the price of 1.2290 (thicker green line on the chart). Growth will resume if the labor market data in the US dissappoints. But remember that when buying, the MACD line should be above zero or is starting to rise from it.
Pound can also be bought at 1.2213, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.2248 and 1.2290.
For short positions:
Sell pound when the quote reaches 1.2213 (red line on the chart) and take profit at the price of 1.2174. Pressure will come back if the upcoming US statistics exceed expectations. But take note that when selling, the MACD line should be below zero or is starting to move down from it.
Pound can also be sold at 1.2248, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.2213 and 1.2174.
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 decision based on the current market situation is an inherently losing strategy for an intraday trader.