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16.03.2023 08:57 AM
Analysis and trading tips for GBP/USD on March 16

Analysis of transactions and tips for trading GBP/USD

The pair tested 1.2131 at a time when the MACD line was just starting to move below zero, which was a good signal to sell. This resulted in a price decrease of about 7 pips. No other market signal appeared for the rest of the day.

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The publication of the UK budget did not cause a critical change in GBP/USD as a downward correction is already long overdue. As for today, markets should keep a close eye on the situation around the banking sector as a decline in investor sentiment and risk appetite could add pressure on pound. The US is also set to release reports on jobless claims and number of building permits issued, which are important for the economy. A positive change could lead to a stronger dollar demand which, in turn, will cause pound to decline. Data on new foundations and the Philadelphia Fed manufacturing index will have little impact on the market.

For long positions:

Buy pound when the quote reaches 1.2084 (green line on the chart) and take profit at the price of 1.2113 (thicker green line on the chart). Growth is possible, but it will only be only in the morning. Nevertheless, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.2058, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2084 and 1.2113.

For short positions:

Sell pound when the quote reaches 1.2058 (red line on the chart) and take profit at the price of 1.2025. Pressure may return if the US reports better-than-expected economic statistics. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2084, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2058 and 1.2025.

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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.

Jakub Novak,
Analytical expert of InstaForex
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