Analysis and trading tips for GBP/USD on on October 19
October 19, 2023 7:23 amVideo
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Analysis of transactions and tips for trading GBP/USD
Further decline became limited because the first test of 1.2163 coincided with the sharp rise of the MACD line from zero. Meanwhile, the second test occurred when the MACD line lay in the oversold area, prompting a signal to buy. However, no strong price increase took place, resulting in losses.
The released inflation data for the UK led to a slight spike in pound, but strong data on the US real estate market reversed the trend, continuing the bearish market. Traders should also not rush into long positions today due to the empty macroeconomic calendar. Better wait for the speeches of Fed representatives scheduled in the afternoon.
For long positions:
Buy when pound hits 1.2140 (green line on the chart) and take profit at the price of 1.2180 (thicker green line on the chart). Growth may occur as a slight correction in the morning, as how the markets will react to Powell’s speech remains a mystery. However, when buying, the MACD line should be above zero or just start to rise from it.
Pound can also be bought after two consecutive price tests of 1.2103, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2140 and 1.2180.
For short positions:
Sell when pound reaches 1.2103 (red line on the chart) and take profit at the price of 1.2070. Pressure may intensify as the pair already went below last week’s low. However, when selling, the MACD line should be below zero or drop down from it.
Pound can also be sold after two consecutive price tests of 1.2140, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2103 and 1.2070.
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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