Analysis of transactions and tips on trading the British pound
The price test of 1.2785 came at a time when the MACD was starting to move down from zero, which, against the background of the lack of statistics for the UK, allowed us to count on implementing scenario No. 1 for the sale of the pound. At the time of writing, the pair had gone down about 15 points, which was the end. Whether the pound will follow the euro after the ECB's decision is a rather complex question, but it is likely. Therefore, paying close attention to ECB President Christine Lagarde's speech is essential. Data on the number of initial applications for unemployment benefits in the United States and the foreign trade balance are also ahead. Still, they are unlikely to be able to significantly affect market sentiment. As for the intraday strategy, I plan to act based on implementing scenarios No. 1 and No. 2.
Buy signal
Scenario No. 1: I plan to buy the pound today when I reach the entry point in the area of 1.2788 (green line on the chart) to grow to 1.2845 (thicker green line on the chart). In the area of 1.2845, I will exit purchases and open sales in the opposite direction (counting on a movement of 30-35 points in the opposite direction from the level). The pound's growth today can be counted on only in the case of very weak statistics in the United States. Important! Before buying, ensure the MACD indicator is above the zero mark and is just starting to grow from it.
Scenario No. 2: I also plan to buy the pound today in the case of two consecutive price tests of 1.2762 at a time when the MACD indicator will be in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. We can expect an increase to the opposite levels of 1.2788 and 1.2845.
Sell signal
Scenario No. 1: I plan to sell the pound today after updating the level of 1.2762 (the red line on the chart), leading to a rapid decline in the pair. The key target of sellers will be the 1.2712 level, where I will exit sales and immediately open purchases in the opposite direction (counting on a movement of 20-25 points in the opposite direction from the level). Sellers will prove themselves in the case of strong US data. Important! Before selling, ensure the MACD indicator is below the zero mark and is just beginning to fall from it.
Scenario No. 2: I also plan to sell the pound today in the case of two consecutive price tests of 1.2788 at a time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward reversal of the market. We can expect a decline to the opposite levels of 1.2762 and 1.2712.
What's on the chart:
Thin green line is the entry price at which you can buy a trading instrument.
Thick green line is the estimated price where you can place Take profit or fix profits yourself, since further growth is unlikely above this level.
Thin red line is the entry price at which a trading instrument can be sold.
Thick red line is the estimated price at which you can place a Take profit or fix profits yourself since further decline is unlikely below this level.
MACD indicator. When entering the market, it is important to be guided by overbought and oversold zones.
Important. Novice traders in the forex market must carefully decide about entering the market. Before releasing important fundamental reports, staying out of the market is best to avoid falling into sharp fluctuations in the exchange rate. If you decide to trade during the news release, always place stop orders to minimize losses. You need to place stop orders to lose your entire deposit quickly, especially if you do not use money management but trade in large volumes.
Remember that for successful trading, you need a clear trading plan, following the example I presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.
