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24.03.2023 09:05 AM
Analysis and trading tips for GBP/USD on March 24

Analysis of transactions and tips for trading GBP/USD

The pair tested 1.2335 at a time when the MACD line was already far from zero, limiting the upside potential of the pair. Sometime later, there was another test, but this time the level was 1.2306. The MACD line was still far from zero, so the downside potential was also limited.

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The Bank of England's decision on interest rates was what economists expected, so nothing interesting happened in the market. Today, the UK will publish data on manufacturing and service activity which, if shows a decline, will further weaken pound's position. Similar reports from the US in the afternoon could reduce demand for dollar, provided that the readings are weak.

For long positions:

Buy pound when the quote reaches 1.2290 (green line on the chart) and take profit at the price of 1.2324 (thicker green line on the chart). Growth is possible, but it will only be after very good statistics from the UK. Traders have to make sure though that the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.2274, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2290 and 1.2324.

For short positions:

Sell pound when the quote reaches 1.2274 (red line on the chart) and take profit at the price of 1.2229. Pressure may return at any moment as there are no more new reasons to buy. 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 1.2290, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2274 and 1.2229.

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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.

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