Analysis of transactions in the GBP / USD pair

A signal to buy emerged after GBP/USD hit 1.3542. Coincidentally, the MACD line was moving above zero, so the pair rose by around 25 pips. But after that was a dip to 1.3519, during which the MACD line had already gone down quite a lot from zero. Surprisingly, there was no strong decline as the pair halted its fall around 1.3495 and then bounced back by 40 pips.

The UK unemployment report came out quite controversial. The unemployment rate remained unchanged and the number of jobless claims fell, but wages increased far more than projected. And during the US session, the strong jump in the US producer price index raised demand for the dollar, thereby pulling the GBP/USD rate down. Most likely, this bearish move will extend today if UK CPI dips as expected. The house price index, on the other hand, is unlikely to seriously affect the market. In the afternoon, the US will release a report on industrial production, which, if indicates a further increase in inflationary pressure, could force the Fed to act more aggressively. The central bank will also publish its January minutes, and that could provoke another rally in dollar and decrease in GBP/USD.

For long positions:

Buy pound when the quote reaches 1.3560 (green line on the chart) and take profit at the price of 1.3598 (thicker green line on the chart). A rally will occur if inflation data in the UK exceeds expectations. 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 1.3539, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.3560 and 1.3598.

For short positions:

Sell pound when the quote reaches 1.3539 (red line on the chart) and take profit at the price of 1.3495. A decline and breakout of weekly lows will depend entirely on the upcoming US data and on the market reaction to the Federal Reserve protocol. In any case, 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 1.3560, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3539 and 1.3495.

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.