17.05.202212:53 Forex Analysis & Reviews: Analysis and trading tips for GBP/USD on May 17

Analysis of transactions in the GBP / USD pair

GBP/USD reaching 1.2223 led to a sell signal in the market, however, there was no price decrease even though the MACD line was moving below zero. The second test was also unsuccessful, while the third test led to some profit. However, the signal then was to buy because the MACD line was in the oversold area. That resulted in a 30-pip increase in the pair. Some time later, a test of 1.2256 took place, but it also failed as the MACD line was so far from zero.

GBP/USD rose yesterday morning because there were no UK statistics published. At the same time, the statements made by Bank of England Governor Andrew Bailey increased demand during the US session.

Pound's rally extended today because UK's data on jobless claims and earnings were quite good, leading to increased demand for the asset. If the US reports weak data on retail sales, the pound will rise even more, continuing the bullish trend. A softer position of Fed members will also put pressure on dollar

For long positions:

Buy pound when the quote reaches 1.2391 (green line on the chart) and take profit at the price of 1.2455 (thicker green line on the chart). There is a chance for a rally today, but only in the afternoon, when the US publishes weak data on retail sales. 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 1.2349, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2391 and 1.2455.

For short positions:

Sell pound when the quote reaches 1.2349 (red line on the chart) and take profit at the price of 1.2297. Pressure may return at any moment, especially if the US reports good macroeconomic statistics. 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 1.2391, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.2349 and 1.2297.

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.