Overview of trading and tips on GBP/USD
The price test of 1.2650 occurred when the MACD indicator had just started to fall from the zero mark, which confirmed the correct entry point to sell the pound in continuation of the downward trend that had clearly been emerging over the last few days. Ultimately, GBP/USD fell by about 30 pips. Buying on the bounce from 1.2627 did not yield significant profits. The market ignored the Confederation of British Industry's monthly retail sales balance, and there were no reasons left to buy the pound on Wednesday. Today, it's unlikely that anything will change, as a speech by Bank of England Governor Andrew Bailey, who adopted a rather dovish stance at the end of the last meeting, is expected. In addition, the minutes of the BoE's Monetary Policy Committee meeting will be published, and the pound will only get a chance to recover in the second half of the day if buyers can withstand all this pressure. As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and 2.
Buy signals
Scenario No 1. Today, I plan to buy the pound when the price reaches the entry point at 1.2648 plotted by the green line on the chart, aiming for a rise to the level of 1.2670 plotted by the thicker green line on the chart. Around 1.2670, I plan to exit the long positions and sell the pound in the opposite direction, counting on a movement of 30-35 pips from the entry point. You can count on the pound to rise today, but only after strong data. Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario No 2. I also plan to buy the pound today in case of two consecutive tests of the price at 1.2624 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse market upturn. One can expect growth to the opposite levels of 1.2648 and 1.2670.
Sell signals
Scenario No 1. Today, I plan to sell the pound after testing the level of 1.2624 plotted by the red line on the chart, which will lead to a rapid decline in GBP/USD. The key target for sellers will be 1.2595, where I am going to close short positions and also open long positions in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from that level). You can sell the pound after weak data in continuation of the trend. Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario No 2. I also plan to sell the pound today in case of two consecutive price tests of 1.2648 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. One can expect a decline to the opposite levels of 1.2624 and 1.2595.
What's on the chart:
The thin green line is the entry price at which you can buy the trading instrument.
The thick green line is the estimated price where you can set Take-Profit (TP) or manually close positions, as further growth above this level is unlikely.
The thin red line is the entry price at which you can sell the trading instrument.
The thick red line is the price where you can set Take-Profit (TP) or manually close positions, 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 forex market need to be very careful 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 in large volumes.
And 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.
