Analysis of transactions in the GBP / USD pair

Pound first tested 1.1799 at the time when the MACD was far from zero, which limited the downside potential of the pair. The second test resulted in a similar scenario, while the third occurred when the MACD line was just starting to move below zero, which was a good signal to sell. This time, the quote fell by more than 55 pips.

Although pound fell and hit new yearly lows because there were no important statistics in the UK yesterday, pressure will ease because sellers are likely to decrease ahead of the economic symposium in Jackson Hole on Friday.

But for today, the bearish dynamics will continue as upcoming reports in business activity and composite PMI in the UK will prompt new waves of sell-offs, provided that the figures fell short of forecasts. Then, similar data will be coming from the US in the afternoon, but it is unlikely to harm dollar. Only a weak home sales report can shake the market as that will indicate the onset of a recession.

For long positions:

Buy pound when the quote reaches 1.1775 (green line on the chart) and take profit at the price of 1.1831 (thicker green line on the chart). Demand will rise if statistics from the UK exceed expectations.

Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1725, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1775 and 1.1831.

For short positions:

Sell pound when the quote reaches 1.1725 (red line on the chart) and take profit at the price of 1.1666. Pressure could return at any moment, especially if the UK reports a weak PMI data.

Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1775, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1725 and 1.1666.

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.