Analysis of Trades and Tips for Trading the British Pound
Testing the price of 1.2885 occurred when the MACD indicator began moving downward from the zero mark, making it a suitable opportunity for opening short positions, resulting in a slight downward movement of the pair by 12 points. However, after updating the weekly low, the pressure on the pound decreased, and the pair returned to the channel's range. Ahead, we have data covering the entire American economy. Expected figures include the GDP change for the second quarter of this year and the Personal Consumption Expenditures (PCE) index for June. Additionally, remember the weekly data on initial jobless claims and changes in durable goods orders for June. These key indicators will have a strong impact on the market. In the case of weak statistics, the US dollar will likely fall, allowing the pound to regain its position. Regarding the intraday strategy, I plan to act based on the implementation of scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the pound when the entry point reaches around 1.2893 (the green line on the chart) to target a rise to 1.2945 (the thicker green line). At around 1.2949, I will exit the buys and open sales in the opposite direction, expecting a movement of 30-35 points away from the level. Growth in the pound can be expected today after weak US data. Important! Before buying, ensure the MACD indicator is above the zero mark and is just beginning to rise.
Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the price at 1.2857 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. Growth can be expected to the levels of 1.2893 and 1.2949.
Sell Signal
Scenario #1: I plan to sell the pound today after the price updates to 1.2857 (the red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be 1.2818, where I will exit the sales and immediately open buys in the opposite direction, expecting a movement of 20-25 points away from the level. Sellers will assert themselves after a good correction and strong data. Important! Before selling, ensure the MACD indicator is below the zero mark and is just beginning to decline.
Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the price at 1.2893 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline can be expected to the levels of 1.2857 and 1.2818.
Chart Explanation:
- Thin green line – the entry price for buying the trading instrument;
- Thick green line – the assumed price for placing Take Profit or independently fixing profit, as further growth above this level is unlikely;
- Thin red line – the entry price for selling the trading instrument;
- Thick red line – the assumed price for placing Take Profit or independently fixing profit, as further decline below this level is unlikely;
- MACD Indicator – it is important to be guided by the overbought and oversold zones when entering the market.
Important Advice:
Beginner traders in the Forex market should be cautious when making market entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid being caught in sharp rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit quickly, especially if you do not use money management and trade large volumes.
Remember, for successful trading, you must have a clear trading plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.
