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Analysis of transactions in the GBP / USD pair
GBP/USD reaching 1.2323 led to a sell signal in the market. Coincidentally, the MACD line is also moving below zero, so the pair fell by 40 pips. No other signal appeared for the rest of the day.
The market was very stormy yesterday, especially after the release of CPI reports in the US. The data indicated that prices increased in April, so demand for dollar rose, which led to GBP/USD hitting yearly lows.
Most likely, the pair will continue declining today as the upcoming data on UK GDP, industrial production and business activity are expected to disappoint. But buyers could take advantage of this moment and lock in profits, which may cause a slight upward correction. In the afternoon, the US will release reports on jobless claims and producer prices, which, if shows sharp increases, will lead to another rise in dollar demand. The upcoming speech of Fed member Mary Daly will also provide support for USD.
For long positions:
Buy pound when the quote reaches 1.2227 (green line on the chart) and take profit at the price of 1.2281 (thicker green line on the chart). There is a chance for a rally today, but only if the upcoming reports indicate very good growth on UK GDP for the 1st quarter. Nevertheless, note that when buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.2176, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2227 and 1.2281.
For short positions:
Sell pound when the quote reaches 1.2176 (red line on the chart) and take profit at the price of 1.2134. Pressure may return at any moment, especially if US inflation continues to show continued growth in its April index. But note that when selling, make sure that the MACD line is below zero, or is starting to move down from it. Pound can also be sold at 1.2227, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.2176 and 1.2134.
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.
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