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Analysis of transactions in the GBP / USD pair
The test of 1.1304 happened when the MACD line was far above zero, which limited the upside potential of the pair. No other signals appeared for the rest of the day.
Pound rose on Tuesday after the US reported weaker consumer confidence, which was an indicator of the future contraction of the US economy. The decline in the index is likely to affect retail sales, as well as the general confidence of Americans in their future.
Today, there are no statistics for the UK, so the market will remain bullish and pound could get to the new monthly highs. But much more important are the US data in the afternoon, particularly the foreign trade balance and volume of home sales in the primary market, where a rather serious reduction is expected. That could be another sign of a recession in the US economy, which will lead to another sell-off in dollar and rise in risk appetite.
For long positions:
Buy pound when the quote reaches 1.1487 (green line on the chart) and take profit at the price of 1.1553 (thicker green line on the chart). Growth may occur in accordance with the newly formed trend. But remember that when buying, the MACD line should be above zero or is starting to rise from it.
Pound can also be bought at 1.1439, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1487 and 1.1553.
For short positions:
Sell pound when the quote reaches 1.1439 (red line on the chart) and take profit at the price of 1.1371. Pressure will return if statistics for the US exceed expectations. 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 1.1487, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1439 and 1.1371.
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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