Analysis of transactions in the GBP / USD pair
There were several market signals on Monday and most of them were very successful. For example, there was a signal to sell that coincided with the MACD line going down from zero, so GBP / USD was able to decline by 35 pips. Then, in the afternoon, a signal to buy appeared in the market, which resulted in a 15-20 pip correction. There were no other signals for the rest of the day.
The latest data on UK house prices did not provide significant support to pound, although Rightmove said it showed a new all-time high at £ 338,462
Today, there will be important reports on the UK economy, which could significantly affect the market. These are: net leverage of the public sector and the balance of industrial orders. There will also be data from the United States such as volume of building permits and number of new foundations. Current account on the balance of payments will also be interesting as good data may bring back demand for dollar, which will lead to a decline in GBP / USD.
For long positions:
Open a long position when pound reaches 1.3692 (green line on the chart), and then take profit at the level of 1.3763 (thicker green line on the chart). Price will climb higher if there are good reports from the UK. 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 1.3647, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3692 and 1.3763.
For short positions:
Open a short position when pound reaches 1.3647 (red line on the chart), and then take profit at the level of 1.3585. The pair may continue the downward trend that started last week. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.
The pair could also be sold at 1.3692, but the MACD line should be in the overbought area as only by that will the market reverse to 1.3647 and 1.3585.
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.