Analysis of transactions and tips for trading GBP/USD
The test of 1.2415 occurred when the MACD line was just starting to move above zero, which was a pretty good signal to buy. However, the pair did not rise, resulting in losses. No other signals appeared for the rest of the day.
Although the UK labor productivity report had no impact on the market, buyers tried to continue pound's gains yesterday. However, by afternoon, the strong US GDP report boosted dollar up, resulting in a decrease in GBP/USD. Traders bought back the losses shortly after, which kept the pair in balance for the rest of the day.
Most likely, the sideways trend will continue today as no UK statistics is scheduled to be released. More exciting reports await in the afternoon, namely the core PCE index, the Fed's preferred inflation figure, the change in spending levels and personal income, the consumer sentiment index, and inflation expectations index from the University of Michigan. Good readings will raise dollar demand further, which will lead to another decline in GBP/USD.
For long positions:
Buy pound when the quote reaches 1.2405 (green line on the chart) and take profit at the price of 1.2455 (thicker green line on the chart). Growth could occur as there are no statistics scheduled to be released today. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2360, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2405 and 1.2455.
For short positions:
Sell pound when the quote reaches 1.2360 (red line on the chart) and take profit at the price of 1.2314. Pressure will increase if the upcoming US data exceeds expectations. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2405, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2360 and 1.2314.
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.