27.01.202210:35 Forex Analysis & Reviews: Analysis and trading tips for GBP/USD on January 27

Analysis of transactions in the GBP / USD pair

GBP/USD hit 1.3495 early Wednesday, but there was no strong movement even though the MACD line was below zero. It was only on the second test that the pair moved, however, the indicator was in the oversold area, so traders bought in the market. Such led to a 25-pip increase in the pair. And when the pair hit 1.3520 during the US session, the MACD line was in the overbought area, so short positions prompted a 70-pip decrease in the pair.

The stance of the Fed towards interest rates remained unchanged, so pressure returned on risky assets. That led to another dip of GBP/USD. And most likely, this bearish movement will continue because in the afternoon, the US will publish data on 4th quarter GDP. A strong figure will prompt higher demand for dollar, which will push GBP/USD lower. Reports on UK retail sales, US durable goods orders and US jobless claims will have little effect on the market.

For long positions:

Buy pound when the quote reaches 1.3443 (green line on the chart) and take profit at the price of 1.3471 (thicker green line on the chart). The market will be bullish if retail sales in the Euro area exceed expectations.

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 1.3421, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.3443 and 1.3471.

For short positions:

Sell pound when the quote reaches 1.3421 (red line on the chart) and take profit at the price of 1.3392. The market will remain bearish if data on US GDP outperforms the previous figures.

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 1.3443, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3421 and 1.3392.

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.