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04.11.2021 09:22 AM
Analysis and trading recommendations for GBP/USD on November 4

Analysis of transactions in the GBP / USD pair

There was a signal to buy in GBP / USD on Wednesday, but the increase was limited because the MACD line was quite far from zero. Fortunately the indicator returned to it in the afternoon, allowing traders to safely take long positions. This provoked a 30-pip rise in the pair.

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The Bank of England will announce its latest policy decisions today. Although many do not expect any changes, a surge in volatility will most likely happen. After all, there may be a rate hike soon if UK inflation continues to skyrocket this year.

At the same time, US will publish its data on jobless claims this afternoon, where another increase is expected. If this happens, dollar demand will decline, which will result in a rise in GBP / USD.

For long positions:

Open a long position when pound reaches 1.3672 (green line on the chart) and take profit at 1.3731 (thicker green line on the chart). Price will increase if the Bank of England announces changes to its monetary policy.

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 1.3645, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3672 and 1.3731.

For short positions:

Open a short position when pound reaches 1.3645 (red line on the chart) and take profit at 1.3592. Pressure will return if the Bank of England insists on adhering to a soft monetary policy. Decreased fears over inflationary pressures will push the price down as well.

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 1.3672, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3645 and 1.3592.

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.

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