Analysis of transactions in the GBP / USD pair

A signal to sell emerged after GBP/USD hit 1.2756. However, the MACD line was quite far from zero, so the downside potential was limited. A similar scenario occurred by mid-day, when the pair reached 1.2718. The MACD line was also far from zero that time, so the downside potential was limited. No other signal appeared for the rest of the day.

The speech of Bank of England Governor Andrew Bailey continues to put pressure on the pound, along with skyrocketing energy prices, which exacerbates the decline in UK incomes.

Most likely, the decline will continue today because the upcoming report on the net volume of borrowed funds in the UK's public sector will not be of much interest to investors. In addition, strong US data on consumer confidence and volume of home sales in the primary market will increase demand for the dollar, thereby leading to a stronger decrease in GBP/USD. Data on durable goods orders and Richmond Fed manufacturing index will also affect the market.

For long positions:

Buy pound when the quote reaches 1.2764 (green line on the chart) and take profit at the price of 1.2801 (thicker green line on the chart). However, there is little chance for a rally today because the trend is currently bearish. US data in the afternoon will also not add optimism to traders. In any case, when buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.2726, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2764 and 1.2801.

For short positions:

Sell pound when the quote reaches 1.2726 (red line on the chart) and take profit at the price of 1.2681. Pressure is likely to return on the market, especially if the upcoming UK statistics are disappointing. However, before selling, make sure that the MACD line is below zero, or is starting to move down from it. Pound can also be sold at 1.2764, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2726 and 1.2681.

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 decisions based on the current market situation is an inherently losing strategy for an intraday trader.