Analysis of transactions in the GBP / USD pair

GBP/USD reaching 1.2597 prompted a sell signal in the market, however, having the MACD line far from zero limited the downside potential of the pair. It continued trading to 1.2597, where a buy signal was formed, but since the indicator was still far from zero, the further upside potential became limited. The pair then went back to 1.2597, where another sell signal was formed, but failed again to give the expected profit. No other signal appeared for the rest of the day.

Today, a report on business activity in the UK manufacturing sector will be released, and that will most likely increase pressure on GBP/USD. The US will also publish employment data in the manufacturing and non-farm sector, which could further increase demand for the dollar provided that the values were better than the forecasts. The speech of Fed member James Bullard may also attract the attention of traders, but it is unlikely to provoke large changes in the market.

For long positions:

Buy pound when the quote reaches 1.2599 (green line on the chart) and take profit at the price of 1.2644 (thicker green line on the chart). There is a chance for a rally today, but only amid strong PMI data on the UK. Nevertheless, note that when buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.2578, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2599 and 1.2644.

For short positions:

Sell pound when the quote reaches 1.2578 (red line on the chart) and take profit at the price of 1.2540. Pressure will return if statistics in the UK come out weaker than expected. However, note that 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 1.2599, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2578 and 1.2540.

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.