Analysis and trading tips for GBP/USD on July 19
July 19, 2023 7:25 amVideo
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Analysis of transactions and tips for trading GBP/USD
The test of 1.3099 on Tuesday afternoon, coinciding with the drop of the MACD line from zero, prompted a sell signal that led to a price decrease of over 70 pips.
Very important inflation data for the UK will come out today. Considering the overbought condition of pound and the challenging state of the UK economy, any decrease in price pressure will mean that the Bank of England could halt its interest rate hike cycle, which will lead to a decline in pound in the short term. But if inflation remains at its highs or increases, pound may continue to rise.
For long positions:
Buy when pound hits 1.3055 (green line on the chart) and take profit at the price of 1.3094 (thicker green line on the chart). Growth may occur, but it will only be seen after very strong inflation data in the UK. Nevertheless, when buying, make sure that the MACD line lies above zero or rises from it.
Pound can also be bought after two consecutive price tests of 1.3012, but the MACD line should be in the oversold area as only by that will the market reverse to 1.3055 and 1.3094.
For short positions:
Sell when pound reaches 1.3012 (red line on the chart) and take profit at the price of 1.2975. Pressure may increase amid a sharp decrease in prices. However, when selling, traders should make sure that the MACD line lies below zero or drops down from it.
Pound can also be sold after two consecutive price tests of 1.3055, but the MACD line should be in the overbought area as only by that will the market reverse to 1.3012 and 1.2975.
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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