Analysis of transactions in the GBP / USD pair

GBP/USD reaching 1.2348 led to a sell signal in the market, but having the MACD line far from zero limited the downside potential of the pair.

Pound should rally today because there are no scheduled statistics for the UK. However, sellers will certainly use any good correction that can give them more attractive prices than now, which will clearly limit the upward potential of GBP/USD. In the afternoon, the US will release its CPI data for April, which, if indicates a decline, will lead to a dip in dollar demand and increase in the pair. But if inflation shows a jump, the Fed will be forced to act more aggressively, that is, raise rates by 0.75% during the June meeting. The speech of FOMC member Raphael Bostic is unlikely to have much weight in the overall fundamental picture.

For long positions:

Buy pound when the quote reaches 1.2349 (green line on the chart) and take profit at the price of 1.2398 (thicker green line on the chart). There is a chance for a rally today because there are no UK statistics scheduled for release today, however, no one would actually take risks before the publication of US inflation data for April. In any case, 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 1.2323, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2349 and 1.2398.

For short positions:

Sell pound when the quote reaches 1.2323 (red line on the chart) and take profit at the price of 1.2265. Pressure may return at any moment, especially if US inflation continues to show continued growth in its April index. But note that 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 1.2349, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.2323 and 1.2265.

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.