Analysis of transactions in the GBP / USD pair

A signal to buy emerged after GBP/USD hit 1.3631. However, there was no increase because the MACD line being far from zero limited the upside potential of the pair. Fortunately, the second attempt was successful because by then, the indicator was already declining from record highs. It prompted a more than 30-pip increase in the pair.

Selling at 1.3614 also did not lead to the expected decrease because the MACD line was far from zero. No other signal appeared for the rest of the day.

Pound rose on Monday morning, thanks to strong data on composite PMI, as well as business activities in the UK manufacturing and services sector. Sadly, a turnaround occurred on the afternoon, primarily due to escalating tensions in Ukraine. Markets were also closed in celebration of US Presidents' Day.

Bank of England Deputy Governor is scheduled to make a speech today, and his statements could provoke a rise in GBP/USD provided that his tone is against inflation. However, a rally is unlikely to last long because tension in Ukraine is worsening. Meanwhile, data on UK industrial orders has little chance to affect markets.

The US will post data on consumer confidence in the afternoon, but even if the indicator shows a decrease, demand for dollar will not to dip. Reports on US home prices, manufacturing PMI and service PMI, on the other hand, are unlikely to lead to a serious spike in volatility.

For long positions:

Buy pound when the quote reaches 1.3599 (green line on the chart) and take profit at the price of 1.3636 (thicker green line on the chart). A rally will occur if the upcoming speeches of Bank of England representatives show a hawkish stance on monetary policy.

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 1.3567, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.3599 and 1.3636.

For short positions:

Sell pound when the quote reaches 1.3567 (red line on the chart) and take profit at the price of 1.3530. Pressure will return if data on UK retail sales turn out weaker than expected and if tension in Ukraine escalates.

But 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 1.3599, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3567 and 1.3530.

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.