Analysis of transactions in the GBP / USD pair
There were no market signals in GBP / USD on Thursday so the day passed by quite calmly. But the lack of macro statistics resulted in a slight pressure on bullish traders, which slowly but surely pushed the pair to 1.3690. A similar scenario is expected to occur today as there are still no important macro statistics scheduled to be released. But bullish traders may try to get ahold of the market, which, in turn, will lead to a small upward correction.
Then, in the afternoon, US will release data on income and expenses, but the whole emphasis will remain on the speech of Fed Chairman Jerome Powell at the Jackson Hole symposium. Powell is expected to outline clearer prospects on the support measures and bond purchase program, which could strengthen dollar and weaken pound. But if he doesn’t, demand for GBP / USD may return and the pair will again test the weekly highs.
For long positions:
Open a long position when pound reaches 1.3715 (green line on the chart), and then take profit at the level of 1.3767 (thicker green line on the chart). GBP / USD will climb up if bullish traders successfully take control of the market. But before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.3674 and 1.3621, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3715 and 1.3767.
For short positions:
Open a short position when pound reaches 1.3674 (red line on the chart), and then take profit at the level of 1.3621. A decline will occur if the Fed indicates potential changes in the monetary policy. But before selling, make sure that the MACD line is below zero, or is starting to move down from it. It is also possible to sell at 1.3715 and 1.3767, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3674 and 1.3621.
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.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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