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Analysis of transactions in the GBP / USD pair
Pound tested 1.1484 when the MACD line was far from zero, which limited the upside potential of the pair. Sometime later, there was a test of the level again, but the MACD line was still at the area it was before so there was no large movement. No other signals appeared for the rest of the day.
Pound did not move much yesterday despite the weak reports on the services and composite PMI in the UK. The reason was the manipulation of large players, which happened due to low volatility amid the holiday in the US.
Today, a number of reports are scheduled to be published, such as the index of business activity in the UK construction sector. If the figure turn out to be better than expected, a slight increase in GBP/USD will be seen. In the afternoon, data on business activity in the services sector and PMI for the US will be released, which will hit the positions of dollar and may lead to a rise in risk appetite, provided that the numbers are lower than the forecasts. For this reason, expect further growth and upward correction in the pair.
For long positions:
Buy pound when the quote reaches 1.1597 (green line on the chart) and take profit at the price of 1.1657 (thicker green line on the chart). Growth will occur if activity in the construction sector exceeds expectations.
Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1559, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1597 and 1.1657.
For short positions:
Sell pound when the quote reaches 1.1559 (red line on the chart) and take profit at the price of 1.1515. Pressure will increase if the attempt to consolidate at daily highs fails.
Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1597, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1559 and 1.1515.
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.
InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.
