24.05.202213:50 Forex Analysis & Reviews: Analysis and trading tips for GBP/USD on May 24

Analysis of transactions in the GBP / USD pair

GBP/USD reaching 1.2573 led to a buy signal in the market. Coincidentally, the MACD line was just starting to move above zero, so the pair rose by 20 pips. It could have jumped 30 pips more, but the pound did not take a sharper upward spurt.

The lack of statistics in the UK yesterday helped bulls continue the upward trend.However, with each update of the monthly high, it is clear that there are fewer and fewer people who want to buy pound. As such, today, traders should be very careful with new purchases, especially since much will depend on the upcoming reports on activity in the manufacturing and service sectors. Weak data can lead to the pair moving down and overlapping all yesterday's growth. There will also be a report on UK retail sales, but that is unlikely to have a significant impact on the pound.

In the afternoon, similar reports from the US will be published, which, if shows even a slight slowdown in growth, will negatively affect the dollar. By the middle of the American session, an interview with Fed Chairman Jerome Powell will take place, and this may shed light on the situation with interest rates. Data on the volume of home sales in the US primary market will have little to no effect on the market.

For long positions:

Buy pound when the quote reaches 1.2587 (green line on the chart) and take profit at the price of 1.2633 (thicker green line on the chart). There is a chance for a rally today, but only after very good data on UK PMI. 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 1.2557, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2587 and 1.2633.

For short positions:

Sell pound when the quote reaches 1.2557 (red line on the chart) and take profit at the price of 1.2505. Pressure is likely to return if upcoming reports indicate poor performance in the UK. 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 1.2587, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2557 and 1.2505.

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.