Analysis of trades and trading tips for the British pound
The test of the price at 1.2648 occurred at a moment when the MACD indicator had risen significantly above the zero mark, which limited further upward potential. A second test of this price shortly afterward led to the execution of scenario #2 for selling, as I detailed in my morning forecast. However, this only resulted in a drop of the pound by 8 points. The strategy was revised for the second half of the day. It's important for traders to understand the direction of American inflation, and data on the core Personal Consumption Expenditures Index, as well as changes in consumer spending and income, will help with this. A rise in inflation will strengthen the dollar and weaken the pound. Speeches by FOMC members Thomas Barkin and Michelle Bowman will also be closely watched. Regarding the intraday strategy, I plan to act based on the implementation of scenarios #1 and #2.
Signal for Buying
Scenario #1: Today, I plan to buy the pound when the entry point reaches around 1.2657 (green line) with the target price of 1.2695 (thicker green line on the chart). At 1.2695, I will exit the purchases and open sales in the opposite direction (anticipating a movement of 30-35 points in the opposite direction from this level). Today, a rise in the pound can be expected only after weak US data and a decrease in inflation. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario #2: I also plan to buy the pound today in case the price at 1.2630 is tested twice consecutively when the MACD indicator is in oversold territory. This will limit the pair's downside potential and lead to a reversal of the upward market. Expect growth towards the opposite levels of 1.2657 and 1.2695.
Signal for Selling
Scenario #1: Today, I plan to sell the pound after it updates to 1.2630 (red line on the chart), leading to a rapid decline in the pair. The key target for sellers will be the level of 1.2595, where I will exit the sales and immediately open purchases in the opposite direction (anticipating a movement of 20-25 points in the opposite direction from this level). Sellers will show themselves after strong figures from the US and news of increasing price pressure. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario #2: I also plan to sell the pound today if the price at 1.2657 is tested twice consecutively when the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a downward market reversal. Expect a decline towards the opposite levels of 1.2630 and 1.2595.
What's on the chart:
Thin green line - entry price for buying the trading instrument;
Thick green line - anticipated price where you can place Take Profit or independently fix your profit, as further growth above this level is unlikely;
Thin red line - entry price for selling the trading instrument;
Thick red line - anticipated price where you can place Take Profit or independently fix your profit, as further decline below this level is unlikely;
MACD indicator. When entering the market, following overbought and oversold zones is important.
Important. Beginner traders in the Forex market must decide to enter the market cautiously. It's best to stay out of the market before important fundamental reports to avoid sudden price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You need to place stop orders to quickly lose your entire deposit, especially if you're not using money management and trading in large volumes.
And remember, successful trading requires a clear trading plan like the one presented above. Spontaneous decision-making based on the current market situation is initially a losing strategy for an intraday trader.
