Analysis of transactions in the GBP / USD pair
There is little chance that pound will update its yearly low today because of the upcoming statistics for the UK. Yesterday's decision of the Bank of England also had a negative impact on the quotes since interest rates were raised by 0.75% and the central bank said that it will continue to act more aggressively in order to completely defeat inflation.
A number of reports are due out today, such as the index of business activity in the manufacturing sector, the service sector and composite index of the UK. The index for the services sector may show growth, but the rest will remain below 50 points, which will provoke a new wave of sell-offs in pound. Similar data from the US will also be released in the afternoon, and these indices may surprise traders. That is likely to lead to another rise in dollar, especially if Fed Chairman Jerome Powell talks about further rate hikes and fight against inflation.
For long positions:
Buy pound when the quote reaches 1.1252 (green line on the chart) and take profit at the price of 1.1289 (thicker green line on the chart). Growth is unlikely, but everything can change if traders fail to break through the yearly lows.
Take note that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.1227, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1252 and 1.1289.
For short positions:
Sell pound when the quote reaches 1.1227 (red line on the chart) and take profit at the price of 1.1188. Pressure will return if the UK reports weak economic statistics.
Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1252, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1227 and 1.1188.
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 decision based on the current market situation is an inherently losing strategy for an intraday trader.