Analysis of transactions in the GBP / USD pair

GBP / USD reached 1.3625 at a time when the MACD line was far from zero. That limited the downside potential of the pair, so traders could not take short positions as it may lead to losses. Some time after, the pair reached the level for the second time, however, the market signal was to buy, so the quote rose by 70 pips. There were no other signals for the rest of the day. ...

GBP / USD rallied yesterday because US CPI matched the forecast of economists. The data indicated that the Fed does not have to be aggressive in raising rates, so demand for dollar did not surge. The Fed Beige Book was ignored as it has no importance to the forex market.

There are no important reports on the UK today, except for house prices from RICS. Bank of England member Catherine Mann will also give a speech, and that could prompt further growth in pound.

In the afternoon, the US will release data on producer prices, but that is unlikely to raise dollar. Perhaps, jobless claims could increase its quote, albeit a little. There will also be speeches from Fed members Lael Brainard and Charles Evans.

For long positions:

Buy pound when the quote reaches 1.3718 (green line on the chart) and take profit at the price of 1.3757 (thicker green line on the chart). But before doing so, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.3691, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.3718 and 1.3757.

For short positions:

Sell pound when the quote reaches 1.3691 (red line on the chart) and take profit at the price of 1.3646. Pressure will return if US inflation exceeds 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 1.3718, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3691 and 1.3646.

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.