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Analysis of transactions in the GBP / USD pair
The price test of 1.1473 occurred at the moment when the MACD line was just starting to move above zero, which was a good signal to buy. Sadly, there was no price increase as the pair resumed falling towards 1.1418. By the time euro tested this level, the MACD line was moving below zero, which was a good signal to sell. This led to a price decrease of over 80 pips.
Buying on the rebound from 1.1333 gave about 15 pips of profit, but after that pound resumed declining.
Pound fell because of weak business activity and composite PMI in the UK. Dollar, on the other hand, surged as the employment report from ADP and foreign trade balance exceeded expectations.
A number of reports are scheduled to be released today, such as PMI for the UK construction sector and speech of Bank of England MPC member Jonathan Haskel. But in the afternoon, there is no important statistics, so everything should go quietly before tomorrow's report on the US labor market. Weekly jobless claims and speeches of Fed members Charles Evans and Lisa Cook will come out, but they will have little effect on the market direction.
For long positions:
Buy pound when the quote reaches 1.1365 (green line on the chart) and take profit at the price of 1.1425 (thicker green line on the chart). Growth may occur as long as activity data does not disappoint. But take note that when buying, the MACD line should be above zero or is starting to rise from it.
Pound can also be bought at 1.1309, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1365 and 1.1425.
For short positions:
Sell pound when the quote reaches 1.1309 (red line on the chart) and take profit at the price of 1.1252. Pressure will return in case of weak statistics and a decrease in risk appetite. But 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 1.1365, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1309 and 1.1252.
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.
