Analysis of Trades and Tips for Trading the British Pound
There were no tests of the levels I identified in the first half of the day. Hopefully, the U.S. session will be more interesting. Reports on the Consumer Confidence Index are scheduled, and positive changes in this indicator could help the dollar rise against the pound. Conversely, weak dynamics could play in favor of the pound. Additionally, data on the S&P/Case-Shiller 20-City Home Price Index and the Housing Price Index will also be released. As for the intraday strategy, I plan to act based on the implementation of Scenario 1 and Scenario 2.
Buy Signal
Scenario 1: Today, I plan to buy the pound upon reaching the entry point around 1.2868 (green line on the chart) with a target of rising to the 1.2890 level (thicker green line on the chart). Around 1.2890, I will exit the purchases and open sales in the opposite direction (expecting a 30 to 35 point move in the opposite direction from the level). One can only count on the pound's growth today with a small correction. Important! Before buying, make sure the MACD indicator is above the zero mark and just beginning to rise from it.
Scenario 2: I also plan to buy the pound today in case of two consecutive tests of the 1.2848 price level 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 opposite levels of 1.2868 and 1.2890.
Sell Signal
Scenario 1: Today, I plan to sell the pound after updating the 1.2848 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 1.2824 level, where I will exit the sales and immediately open purchases in the opposite direction (expecting a 20 to 25 point move in the opposite direction from the level). Sellers will only appear after strong U.S. data. Important! Before selling, make sure the MACD indicator is below the zero mark and just beginning to fall from it.
Scenario 2: I also plan to sell the pound today in case of two consecutive tests of the 1.2868 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decline can be expected to the opposite levels of 1.2848 and 1.2824.
Chart Explanation:
Thin green line – entry price where the trading instrument can be bought.Thick green line – the estimated price where Take Profit orders can be placed, or profits can be fixed manually, as further growth above this level is unlikely.Thin red line – entry price where the trading instrument can be sold.Thick red line – the estimated price where Take Profit orders can be placed, or profits can be fixed manually, as further decline below this level is unlikely.MACD indicator. It is important to consider the overbought and oversold zones when entering the market.
Important. Beginner forex traders should be very cautious when making market entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid sharp exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. You need to set stop orders to avoid losing your entire deposit, especially if you do not practice proper money management and trade large volumes.
Remember, successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.
