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Analysis of transactions in the GBP / USD pair
The market signal last Friday was to sell, but there was no large movement even though the MACD line was in the overbought area. Instead, the quote increased slightly and returned to 1.3379.
Although the speech of Jonathan Haskel did not impress traders, GBP / USD rose because the bulls took advantage of the lack of statistics to push the pair up. In addition, weak US consumer sentiment put pressure on the dollar, accordingly raising the price of the pound higher.
Parliamentary hearings on the Bank of England's monetary policy report will be held today, followed by the speech of BoE Governor Andrew Bailey. A lot will depend on his statements because if Bailey repeats everything he said earlier, pressure on the pound will return. But if the BoE chief changes his stance, demand for the currency will increase, which, in turn, will push its price up.
Trading will lag in the afternoon because there is only the manufacturing index from New York. There is little chance that the data will affect the market, so do not expect a sharp rise in dollar.
For long positions:
Open a long position when pound reaches 1.3441 (green line on the chart) and take profit at 1.3494 (thicker green line on the chart). Growth will be observed if the Bank of England says hawkish policy statements and if there is good news on Brexit.
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 1.3414, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3441 and 1.3494.
For short positions:
Sell pound when the quote reaches 1.3414 (red line on the chart) and take profit at the price of 1.3353. The decline will continue if the Bank of England insists on a super-soft policy.
Before selling, make sure that the MACD line is below zero, or is starting to move down from it. Pound can also be sold at 1.3441, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3414 and 1.3353.
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.
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.
