Forex Analysis & Reviews: 01.12.2021 - Analysis and trading tips...

01.12.2021 09:55 AM

Analysis and trading tips for GBP/USD on December 1

Analysis of transactions in the GBP / USD pair

Pound rose by 35 pips on Tuesday due to a signal to buy that appeared when the MACD line was above zero. But after the speech of Fed Chairman Jerome Powell, the quote fell and tested 1.3305, which provoked a signal to sell. At this moment the MACD line was under zero, so the pair moved further down by 40 points.

GBP / USD fell yesterday afternoon after Fed Chairman Jerome Powell said the central bank will wind down bond purchases faster than initially projected. But today the situation may change as the UK will report data on manufacturing PMI, which may raise demand for pound and bring buyers to the market. The speech of Bank of England Governor Andrew Bailey will also be important as it could help pound get out of the flat market if it hints at a more aggressive approach on monetary policy. In the afternoon though, strong US PMI report, employment data and hawkish statements from Fed chairman Jerome Powell and Treasury Secretary Janet Yellen could bring demand back to dollar, which, in turn, will push GBP / USD down.

For long positions:

Buy pound when the quote reaches 1.3330 (green line on the chart) and take profit at the price of 1.3363 (thicker green line on the chart). An increase will be observed if manufacturing activity in the UK exceeds expectations. The speech of Bank of England Governor Andrew Bailey will also be important.

Before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.3305, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3330 and 1.3363.

For short positions:

Sell pound when the quote reaches 1.3305 (red line on the chart) and take profit at the price of 1.3267. A decline will occur if Bailey does not change his stance on monetary policy.

Before selling, make sure that the MACD line is below zero, or is starting to move down from it. Pound can also be sold at 1.3330, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3305 and 1.3267.

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.

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*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.