The price tested 1.2093 at the moment when the MACD indicator was far from zero. This capped the pair's upward potential. That is why I was waiting for a sell opportunity. Shortly after the pair dropped below 1.2093, the price once again tested this level. It was clearly seen that the MACD indicator was returning to the overbought area. This led to a sell signal. However, traders were waiting for a decline for a long time. Those who were patient managed to earn about 40 pips.
Today, traders will be focused on the speech that will be provided by Andrew Bailey. He is expected to give information about future monetary policy. This may lead to higher volatility and a decline in the pound sterling against the US dollar. The US is going to disclose its consumer confidence data and house price index report. If both indicators exceed forecasts, pressure on the pound sterling will return and the pair may slump to weekly lows. In case of disappointing data, the pound sterling will have a chance to rise.
Signals to buy GBP:
Scenario 1: today, traders may buy the pound sterling if the price hits 1.2025 (a green line) with the target at 1.2098 (a thicker green line). Traders should leave the market at 1.2098 and open positions in the opposite direction, expecting a decline of 30-35 pips. The pound sterling will gain in value only amid hawkish comments from Andrew Bailey. Notably, before opening buy orders, make sure that the MACD indicator is above zero and is starting to climb from this level.
Scenario 2: traders may also go long if the price touches 1.1985. At that moment, the MACD indicator should be in the oversold area, which will limit the downward potential of the pair and cause the market reversal. The pair may rise to 1.2025 and 1.2098.
Signals to sell GBP:
Scenario 1: today, traders may sell the pound sterling after the price goes below 1.19858 (a red line). This will cause a rapid decline in the pair. The key target is located at 1.1938, where traders should close the trade and open the opposite one, expecting a rise of 20-25 pips. Pressure on the pound sterling will return in case of strong data from the US. Notably, before opening sell orders, make sure that the MACD indicator is below zero and is starting to drop from it.
Scenario 2: traders may also sell the pound sterling if the price touches 1.2025. At that moment, the MACD indicator should be in the overbought area, which will cap the upward potential of the pair and cause the price reversal. The pair may slide to 1.1985 and 1.1938.
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.