Relevance up to 08:00 2022-06-08 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 reaching 1.2510 prompted a buy signal in the market. Coincidentally, the MACD line just started to move up, so the pair rose by 35 pips. The quote then reached 1.2546, where a sell signal arose, but it was unsuccessful as the pair continued climbing up.

Pound bulls did not manage to push the price up as there were no UK statistics released yesterday. In addition, pressure gradually returned because there was a weak initiative on the part of US traders, who, apparently, do not really believe in the UK economy. The results of the elections in the UK also led to today's sharp fall in the pound, which will only intensify after the release of economic reports during the European session

As mentioned above, important statistics will be released today, and these are composite PMI and the index of business activity in the UK services sector. If the second indicator suddenly declines more than expected, the market will see a new bearish trend, which will prompt new local lows. US data on foreign trade balance will also increase pressure as a reduction in the value will lead to a rise in dollar demand. Further rise will occur amid good growth in retail sales, as well as a speech from Treasury Secretary Janet Yellen.

For long positions:

Buy pound when the quote reaches 1.2467 (green line on the chart) and take profit at the price of 1.2521 (thicker green line on the chart). There is a chance for a rally today, but only if the latest PMI data in the UK exceeds expectations. 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 1.2417, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2467 and 1.2521.

For short positions:

Sell pound when the quote reaches 1.2417 (red line on the chart) and take profit at the price of 1.2366. Pressure will return if latest statistics indicate a possible slide of the economy into recession. However, 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 1.2467, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2417 and 1.2366.

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.

Read more: https://www.instaforex.eu/forex_analysis/313111