Analysis of transactions in the GBP / USD pair

The price test of 1.1100 happened when the MACD line was far above zero, so the upside potential was limited. No other signals appeared for the rest of the day.

GBP/USD rose on Thursday because the September data on US CPI indicated a slowdown in inflation. As for today, the quarterly bulletin of the Bank of England is due to be released, but it is unlikely to harm the pound. The only thing that could affect it is the decision of the central bank regarding bond purchases. If the Bank of England does not extend its program of buying bonds, pound will sharply lose ground against dollar. Then, in the afternoon, data on US retail sales will be released, and this could force the Fed to raise rates further, provided that the figure indicates the persistence of high inflation. Consumer sentiment and inflation expectations from the University of Michigan will likely be ignored, as will speeches from FOMC members Lisa Cook and Christopher Waller.

For long positions:

Buy pound when the quote reaches 1.1329 (green line on the chart) and take profit at the price of 1.1407 (thicker green line on the chart). Growth will occur as long as the Bank of England continues its program of buying bonds. But remember that when buying, the MACD line should be above zero or is starting to rise from it.

Pound can also be bought at 1.1283, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1329 and 1.1407.

For short positions:

Sell pound when the quote reaches 1.1283 (red line on the chart) and take profit at the price of 1.1195. Pressure will return if upcoming US reports exceed expectations. But take 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 1.1329, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1283 and 1.1195.

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.