Analysis and trading tips for GBP/USD on May 9 (US session)
May 9, 2023 12:23 pm
The test of 1.2635 occurred when the MACD line was already far from zero, so the upward potential was limited. Some time later, there was another test, but this time it was at 1.2611 and the MACD line had just began to move below zero, which was a good reason to sell. However, it was a rather late entry into the market.
It is unlikely that the NFIB Small Business Optimism Index report from the US will cause a fall in GBP/USD as trading will continue to be restrained. The speech by FOMC member John Williams is also unlikely to be full of surprises because the course and direction of the Federal Reserve are clear and understandable.
For long positions:
Buy pound when the quote reaches 1.2635 (green line on the chart) and take profit at the price of 1.2667 (thicker green line on the chart). Weak US statistics will push pound to spike upwards, However, before buying, make sure that the MACD line is above zero and is starting to rise from it. Pound can also be bought after the level of 1.2611 is tested twice, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2635 and 1.2667.
For short positions:
Sell pound when the quote reaches 1.2611 (red line on the chart) and take profit at the price of 1.2569. Pressure could return ahead of the Bank of England meeting. However, before selling, make sure that the MACD line is below zero and is starting to drop down from it. Pound can also be sold after the level of 1.2635 is tested twice, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2611 and 1.2569.
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
The test of 1.2635 occurred when the MACD line was already far from zero, so the upward potential was limited. Some time later, there was another test, but this time it was at 1.2611 and the MACD line had just began to move below zero, which was a good reason to sell. However, it was a rather late entry into the market.
It is unlikely that the NFIB Small Business Optimism Index report from the US will cause a fall in GBP/USD as trading will continue to be restrained. The speech by FOMC member John Williams is also unlikely to be full of surprises because the course and direction of the Federal Reserve are clear and understandable.
For long positions:
Buy pound when the quote reaches 1.2635 (green line on the chart) and take profit at the price of 1.2667 (thicker green line on the chart). Weak US statistics will push pound to spike upwards, However, before buying, make sure that the MACD line is above zero and is starting to rise from it. Pound can also be bought after the level of 1.2611 is tested twice, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2635 and 1.2667.
For short positions:
Sell pound when the quote reaches 1.2611 (red line on the chart) and take profit at the price of 1.2569. Pressure could return ahead of the Bank of England meeting. However, before selling, make sure that the MACD line is below zero and is starting to drop down from it. Pound can also be sold after the level of 1.2635 is tested twice, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2611 and 1.2569.
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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