Analysis of transactions and tips for trading GBP/USD
Pound tested 1.2400 when the MACD line was just starting its downward movement from zero, which was a pretty good reason to sell. This resulted in a price decrease of about 25 pips. No other market signal appeared for the rest of the day.
Although the speech of Bank of England MPC member John Cunliffe had little effect on pound, the update of the weekly low managed to retain the bear market. However, there is a chance that pound will climb up if jobless claims in the UK, the unemployment rate, and the data on average earnings come out not as bad as expected. Of course, if the statistics are disappointing, pressure will exacerbate, which will lead to a further drop in the currency.
Real estate market reports from the US will be released in the afternoon, namely the volume of building permits issued and the number of new foundations laid. If the indicators show a decline, pressure on dollar will increase, resulting in a rally in pound. The speech of FOMC member Michelle Bowman will be of little interest, but traders should still anticipate and listen to it.
For long positions:
Buy pound when the level of 1.2407 (green line on the chart) is reached and take profit at the price of 1.2442 (thicker green line on the chart). Growth will be seen if there is good labor market statistics. However, before buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.2377, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2407 and 1.2442.
For short positions:
Sell pound when the level of 1.2377 (red line on the chart) is reached and take profit at the price of 1.2377. Pressure will return if the upcoming UK statistics disappoints. However, make sure that before selling, the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2407, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2377 and 1.2345.
What’s on the chart:
Thin green line – entry price at which you can buy GBP/USD
Thick green line – estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
Thin red line – entry price at which you can sell GBP/USD
Thick red line – estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line- it is important to be guided by overbought and oversold areas when entering the market
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.
The material has been provided by InstaForex Company – www.instaforex.com
Analysis of transactions and tips for trading GBP/USD
Pound tested 1.2400 when the MACD line was just starting its downward movement from zero, which was a pretty good reason to sell. This resulted in a price decrease of about 25 pips. No other market signal appeared for the rest of the day.
Although the speech of Bank of England MPC member John Cunliffe had little effect on pound, the update of the weekly low managed to retain the bear market. However, there is a chance that pound will climb up if jobless claims in the UK, the unemployment rate, and the data on average earnings come out not as bad as expected. Of course, if the statistics are disappointing, pressure will exacerbate, which will lead to a further drop in the currency.
Real estate market reports from the US will be released in the afternoon, namely the volume of building permits issued and the number of new foundations laid. If the indicators show a decline, pressure on dollar will increase, resulting in a rally in pound. The speech of FOMC member Michelle Bowman will be of little interest, but traders should still anticipate and listen to it.
For long positions:
Buy pound when the level of 1.2407 (green line on the chart) is reached and take profit at the price of 1.2442 (thicker green line on the chart). Growth will be seen if there is good labor market statistics. However, before buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.2377, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2407 and 1.2442.
For short positions:
Sell pound when the level of 1.2377 (red line on the chart) is reached and take profit at the price of 1.2377. Pressure will return if the upcoming UK statistics disappoints. However, make sure that before selling, the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2407, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2377 and 1.2345.
What’s on the chart:
Thin green line – entry price at which you can buy GBP/USD
Thick green line – estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
Thin red line – entry price at which you can sell GBP/USD
Thick red line – estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line- it is important to be guided by overbought and oversold areas when entering the market
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.
The material has been provided by InstaForex Company – www.instaforex.com
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