On Tuesday, a sell signal appeared in GBP/USD when the MACD line moved below zero. This allowed traders to securely short the pair, causing a 40-pip drop. The rest of the day brought no more signs.
GBP/USD trading advice for November 24
The pound fell yesterday on disappointing UK manufacturing and service PMI data. Demand was not boosted by the Bank of England’s Jonathan Haskel and Andrew Bailey’s comments since traders were expecting a more aggressive rate hike in December.
Today’s trade may be delayed due to a lack of UK data. No substantial market impact is expected from a report on industrial orders. Afternoon US GDP report could boost dollar demand if revised upwards. The minutes of the recent Fed meeting will be released after the jobless claims data. If the protocol does not show aggressive committee members, dollar demand will fall.
Positions long:
Buy pound at 1.3386 (green line on chart) and sell at 1.3419 (thicker green line on the chart). A rise is expected if the US announces negative economic statistics.
Before buying, make sure the MACD line is above zero or rising. The market will reverse to 1.3386 and 1.3419 only if the MACD line is in the oversold range.
To fill a void:
Sell pound at 1.3364 (red line on chart) and collect profit at 1.3335. A unsuccessful attempt to gain over 1.3386 and solid US GDP statistics will cause a fall.
The MACD line must be below zero or moving away from it before selling. The pound can be sold at 1.3406, but the MACD line must be overbought for the market to reverse to 1.3380 and 1.3333.
The thin green line is the important level for long trades in GBP/USD.
The quote is unlikely to move above the heavy green line.
The thin red line represents the level at which you can sell GBP/USD.