Analysis of transactions and tips for trading the British pound
The pound remains within the channel due to the absence of significant data from the UK. Considering that there are no data releases expected in the US either, trading is likely to appear somewhat choppy and subdued. However, buyers may take advantage of this and continue the morning's upward correction. If the bulls do not make themselves felt around the local maximum, then the pressure on the pound may return, leading to movement toward the local daily minimum. I will act based on the realization of scenario #1.
Buy Signal
Scenario #1: Today, buying the pound is possible when the entry point around 1.2143 (green line on the chart) is reached, with the aim of reaching the level of 1.2172 (thicker green line on the chart). I recommend exiting your long positions around 1.2172 and opening short positions in the opposite direction (anticipating a movement of 30-35 points in the opposite direction from the level). The pound can be expected to rise in continuation of the morning's upward correction. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just beginning to rise from it.
Scenario #2: Today, buying the pound is also possible in the case of two consecutive tests of the price at 1.2118 when the MACD indicator is in the oversold zone. This will limit the downside potential of the pair and lead to a reverse market movement upward. You can expect an increase towards the opposite levels at 1.2143 and 1.2172.
Sell Signal
Scenario #1: Selling the pound today is only possible after the level of 1.2118 (red line on the chart) is retested, which will lead to a rapid decline in the pair. The key goal for sellers will be the level of 1.2084, where I recommend exiting your short positions and opening long positions in the opposite direction (expecting a movement of 20–25 points in the opposite direction from the level). Pressure on the pound will increase in the event of weak buyer activity around the daily maximum. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting to fall from it.
Scenario #2: Selling the pound today is also possible in the case of two consecutive tests of the price at 1.2143 when the MACD indicator is in the overbought zone. This will limit the upside potential of the pair and lead to a reverse market movement downward. You can expect a decrease towards the opposite levels at 1.2118 and 1.2084.
What's on the chart:
Thin green line - the entry price at which you can buy the trading instrument.
Thick green line - the anticipated price at which you can set Take Profit or independently secure your profit, as further growth above this level is unlikely.
Thin red line - the entry price at which you can sell the trading instrument.
Thick red line - the anticipated price at which you can set Take Profit or independently secure your profit, as further decline below this level is unlikely.
MACD indicator. When entering the market, it is important to follow the overbought and oversold zones.
Important: Beginner traders in the Forex market need to be very cautious when making decisions to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not use proper risk management and trade in large volumes.
And remember that for successful trading, you need to have a clear trading plan, similar to the one presented above. Spontaneous decision-making based on the current market situation is an inherently losing strategy for intraday traders.
