19.05.202211:48 Forex Analysis & Reviews: Analysis and trading tips for GBP/USD on May 19

Analysis of transactions in the GBP / USD pair

GBP/USD reaching 1.2440 led to a sell signal in the market, but having the MACD line far from zero limited the downside potential of the pair. No other signal appeared for the rest of the day.

Although UK inflation jumped slightly lower than what economists expected, GBP/USD still fell because demand decreased, leading to new sell-offs during the US session. But today there may be a slight increase in pound as there is only a report on the balance of industrial orders in the UK, which is of no interest to the market. In the afternoon, data on US jobless claims and manufacturing activity will be released, but those will also have little to no effect on the market. Only a reaction to the volume of housing sales in the secondary market is possible, but that is also unlikely.

For long positions:

Buy pound when the quote reaches 1.2388 (green line on the chart) and take profit at the price of 1.2476 (thicker green line on the chart). There is a chance for a rally today as there are no important UK statistics scheduled to be released. But 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 1.2350, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2388 and 1.2476.

For short positions:

Sell pound when the quote reaches 1.2350 (red line on the chart) and take profit at the price of 1.2285. Pressure is likely to return during the US session because there are no reasons for growth in the current environment. However, 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 1.2388, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2350 and 1.2285.

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.