Relevance up to 01:00 2022-07-16 UTC–4
Analysis of transactions in the GBP / USD pair
GBP/USD tested 1.1824 on Thursday. At that time, the MACD line was quite far from zero, so selling would not be appropriate. However, contrary to what was expected, the pair declined and went to 1.1774. Buyers became active around this area, resulting in more than 60 pips price increase. No other signal appeared for the rest of the day.
GBP/USD fell yesterday because demand for dollar surged amid strong US PPI report. It hit a new yearly low, which opens an opportunity for an upward correction.
Once again, there are no reports about the UK economy that are scheduled to be released today, but buyers could take advantage of this moment to push pound up. However, the increase will only be brief as the US will release data on retail sales and industrial production, as well as reports on consumer expectations and consumer sentiment. Strong values will keep dollar demand high, forcing the pair to continue declining throughout the day.
For long positions:
Buy pound when the quote reaches 1.1845 (green line on the chart) and take profit at the price of 1.1892 (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 1.1815, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1845 and 1.1892.
For short positions:
Sell pound when the quote reaches 1.1815 (red line on the chart) and take profit at the price of 1.1766. Pressure will return if the US releases another strong retail sales report. 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 1.1845, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1815 and 1.1766.
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.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Benefit from analysts’ recommendations right now
Top up trading account
Open trading account
InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.