Analysis of transactions in the GBP / USD pair
Two signals emerged in the pound yesterday. However, they turned out not as profitable as expected. First, since the MACD line moved below zero, short positions build up at 1.3470, but the downward movement did not take place. Instead, the market quickly reversed, in which the test of 1.3499 led to the build up of long positions. Such was also supported by the rise of the MACD line in the chart. However, the growth was only 15 pips, and after which, the market turned down again.
Trading recommendations for December 30
The pound grew strongly today during the Asian session, and it seems that it would continue doing so for the rest of the day. The bulls are working to return the quote to the yearly high, which indicates their faith in the continued strengthening of the pound next year.
Aside from that, economic reports from the US, which are scheduled to be released this afternoon, are unlikely to help the dollar regain its positions against risky assets. However, attention should still be paid to data on foreign trade, Chicago PMI index and the US wholesale price index. Better-than-expected values could limit the upward potential for the pound. With regards to the Brexit trade deal, the only thing that is left is the approval from the UK parliament.
For long positions:
Buy the pound when the quote reaches 1.3546 (green line on the chart), and then take profit at the level of 1.3580 (thicker green line on the chart). Demand for the currency will increase even more if the UK parliament ratifies the Brexit trade deal. But keep in mind that before buying, make sure that the MACD line is above zero and is starting to rise from it.
For short positions:
Sell the pound after the quote reaches 1.3526 (red line on the chart), and then take profit at the level of 1.3481. Demand for the currency is expected to decline due to lack of positive news and uncertainty among traders. Also, keep in mind that before selling, make sure that the MACD line is below zero and is starting to move down from it.
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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