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Analysis of transactions in the GBP / USD pair
GBP/USD tested 1.1965 on Thursday. At that time, the MACD line was just starting to move above zero, so buying was quite appropriate. And given that UK Prime Minister Boris Johnson resigned, the pair rose by more than 50 pips. No other signal appeared for the rest of the day.
Data on UK labor productivity and house price index had little effect on the pound after the news of the prime minister and his resignation. Sellers tried to strike back in the afternoon amid good US jobless claims report and trade surplus, but nothing good came of it.
Ahead are important events for the market, such as the speech of Bank of England Deputy Governor Sam Woods. But even though the pound has excellent chances for continued growth, it will only be possible to break above the local highs during the US session. This is because the upcoming reports from the US, particularly the average hourly wage, change in the number of people employed in the non-farm sector and the unemployment rate, could put pressure on the dollar, especially if the figures were weaker than expected. The speech of FOMC member John Williams is unlikely to affect the market.
For long positions:
Buy pound when the quote reaches 1.2025 (green line on the chart) and take profit at the price of 1.2070 (thicker green line on the chart). There is a chance for a rally today, but it is unlikely that the correction will be protracted, given what data awaits during the US session. Nevertheless, when buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.1992, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.2025 and 1.2070.
For short positions:
Sell pound when the quote reaches 1.1992 (red line on the chart) and take profit at the price of 1.1952. Pressure will return in case of an unsuccessful attempt to go beyond the local highs and strong statistics from the US. 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 1.2025, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1992 and 1.1952.
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.
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