Overview of trading and tips on GBP/USD
The level of 1.2143 happened in the second half of the day exactly at the time when the MACD indicator began its upward move from the zero mark. This generated a buy signal according to scenario No 1. As a result, EUR/USD rose by more than 30 pips. Amid the lack of economic data from the US, the buyers managed to push the instrument higher. Today the economic calendar for the UK is also empty. Therefore, the buyers will grasp the opportunity to push ahead with an upward correction before the policy meeting of the Federal Reserve. The policy decision will be announced tomorrow. As for the intraday strategy, I'm going to stock to scenarios 1.
Buy signals
Scenario No. 1. You can buy GBP/USD today when the price reaches the entry point around 1.2158 plotted by the green line on the chart, aiming to grow to the level of 1.2195 plotted by the thicker green line. In the area of 1.2195, I recommend exiting long positions and opening short ones in the opposite direction, bearing in mind a movement of 30-35 pips in the opposite direction from the level. We expect GBP/USD to rise in the first half of the day only as part of an upward correction. Importantly, before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario No. 2. You may also buy the pound sterling today in case of two consecutive tests of the price of 1.2137 at the time when the MACD indicator is in the oversold area. This will limit the downward potential of the instrument and lead to an upward reversal of the market. We can expect growth to the opposite levels of 1.2158 and 1.2195.
Sell signals
Scenario No. 1. We can open short positions on GBP/USD today only after the level of 1.2137 is updated (the red line on the chart). This will lead to a rapid decline in the price. The key target for the sellers will be the level of 1.2095, where I recommend exiting short positions as well as immediately opening long positions in the opposite direction, betting on a movement of 20-25 pips in the opposite direction from the level. The sellers can return at any time, especially after a breakout of 1.2137, hoping to negate yesterday's growth and maintain trading within the channel. Importantly, before selling, please check whether the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario No. 2. Another option is to go short on GBP/USD today in case of two consecutive tests of 1.2158 at the time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. We reckon a decline to the opposite levels of 1.2137 and 1.2095.
What's on the chart:
Thin green line is the entry price at which you can buy the trading instrument.
Thick green line is the price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
Thin red line is the entry price at which you can sell the trading instrument.
Thick red line is the price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line: it is important to be guided by overbought and oversold areas when entering the market
Important: Novice traders in the cryptocurrency 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 setting stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade with large volumes.
Remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I presented above. Spontaneously making trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.
