Relevance up to 09:00 2022-07-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Analysis of transactions in the GBP / USD pair
GBP/USD tested 1.1891 on Wednesday. At that time, the MACD line was just starting to move below zero, so selling was quite appropriate. However, the decrease was limited because after moving down by just 10 pips, the pair reversed and went to 1.1940. Sometime later, the pair tested 1.1891, also at a time when the MACD had just started to move below zero. This signal was more successful as it led to more than 50 pips price decrease.
UK's data on industrial production, GDP and trade balance helped pound rise yesterday morning, albeit not as much as some would like. Then, in the afternoon, it fell because traders focused more on the June CPI data in the US, which jumped to 9.1%, raising demand for the dollar ahead of further policy decisions by the Fed.
There are no reports that could support pound today, so expect GBP/USD to decline even more. In the afternoon, the US will release a report on producer prices, which is expected to show a slight slowdown amid declining energy costs. Following that are weekly jobless claims data, as well as a speech from Fed member Christopher Waller.
For long positions:
Buy pound when the quote reaches 1.1875 (green line on the chart) and take profit at the price of 1.1950 (thicker green line on the chart). Although there is little chance for a rally today, traders can still take long positions when the MACD line is above zero or is starting to rise from it. It is also possible to buy at 1.1842, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1875 and 1.1950.
For short positions:
Sell pound when the quote reaches 1.1824 (red line on the chart) and take profit at the price of 1.1774. Pressure will return if latest data indicate growing inflationary pressure in the US. 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 1.1875, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1824 and 1.1774.
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.