Analysis of transactions in the GBP / USD pair

GBP/USD tested 1.2169 yesterday. At that time, the MACD line was far from zero, so the downside potential should be limited. Surprisingly, the pair only continued to move down, falling to 1.2125, where buyers became active again. Long positions there led to a 25-pip prince increase.

Data on consumer lending and retail prices in the UK helped pound to stay afloat yesterday morning. However, pressure returned during the US session becase the statements of Fed Chairman Jerome Powell and FOMC member James Bullard brought back the demand for dollar, leading to a decline in GBP/USD.

UK will release its Q1 GDP data today, followed by a report on the housing price index. If there are no significant changes in these indicators, pound may climb up, albeit in just a short time. In the afternoon, a report on personal consumption expenditures, jobless claims and business activity will be released in the US, all of which may push dollar higher. That is likely to result in another decrease in GBP/USD.

For long positions:

Buy pound when the quote reaches 1.2180 (green line on the chart) and take profit at the price of 1.2244 (thicker green line on the chart). There is a chance for a rally today, especially in the face of take profit orders by traders every end of the month. But remember that when buying, the MACD line should be above zero, or is starting to rise from it. It is also possible to buy at 1.2122, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.2180 and 1.2244.

For short positions:

Sell pound when the quote reaches 1.2122 (red line on the chart) and take profit at the price of 1.2069. Pressure will return if there is no bullish activity at the lows and if the UK releases weak economic statistics. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2180, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2122 and 1.2069.

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 decision based on the current market situation is an inherently losing strategy for an intraday trader.