Analysis of transactions in the GBP / USD pair

A signal to sell emerged after GBP/USD hit 1.3540. However, the pair did not decrease as the MACD line was quite far from zero. Then, some time after, pound hit 1.3562. Coincidentally, the MACD line was above zero, so GBP/USD rose by 20 pips. No other signal appeared for the rest of the day.

Contrary to what was expected, US data on wholesale inventories did not affect the market, while the speeches of FOMC representatives Michelle Bowman and Loretta Mester only strengthened equities. But today there may be an increase in GBP/USD as the lack of UK statistics in the morning will help buyers control the market. That will not last long though because a dip is likely to occur if January data on US inflation exceed expectations. A persistently high inflation will undoubtedly force the Fed to take more aggressive actions on monetary policy. Upcoming report on jobless claims will not be of much value to the market after the release of CPI data.

For long positions:

Buy pound when the quote reaches 1.3548 (green line on the chart) and take profit at the price of 1.3582 (thicker green line on the chart). Growth may be seen in the morning, but volatility will be more apparent during the US session.

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 1.3524, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.3548 and 1.3582.

For short positions:

Sell pound when the quote reaches 1.3524 (red line on the chart) and take profit at the price of 1.3483. Pressure will return if economic data in the US, especially inflation, exceed expectations.

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 1.3534, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3511 and 1.3471.

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.