Analysis of transactions in the GBP / USD pair

Pound tested 1.1572 when the MACD line was far below zero, which limited the downside potential of the pair. As for long positions around 1.1525, they did not bring much result. No other signals appeared for the rest of the day.

Pound continued to fall because of the disappointing data on the index of business activity in the UK manufacturing sector. Meanwhile, similar index from the US led to the decline of oil prices, as the better-than-expected figure strengthened the positions of dollar buyers. It also led to the update of yearly lows.

There are no reports scheduled to be released in the UK today, so pressure will most likely continue in markets. Investors will focus on the reports on the unemployment rate, change in the number of people employed in the non-farm sector, change in the average hourly wage and share of the economically active population in the US. All of these are likely to lead to a surge in volatility as their numbers are expected to be much better than the forecasts. This will prompt another decrease in GBP/USD. The opposite scenario will start an upward correction.

For long positions:

Buy pound when the quote reaches 1.1555 (green line on the chart) and take profit at the price of 1.1611 (thicker green line on the chart). Although there is little chance for a rally today, an upward correction could happen if the upcoming US data is weaker than the forecasts.

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 1.1516, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1555 and 1.1611.

For short positions:

Sell pound when the quote reaches 1.1516 (red line on the chart) and take profit at the price of 1.1468. Pressure could return at any moment, especially after strong statistics in the US labor market.

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 1.1555, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1516 and 1.1468.

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.