Analysis of Trades and Tips for Trading the British Pound
The test of the 1.2845 level occurred when the MACD indicator started to move downward from the zero mark, confirming the correct entry point to sell the pound. Adding to this, the news of declining inflation in the U.K. led to a 20-point drop. However, sellers quickly left the market, as the pair's direction will likely be determined by the upcoming U.S. data. The Consumer Price Index (CPI) figures expected from the U.S. will essentially determine the Federal Reserve's policy this fall. A sharp rise in inflation could cause the pair to decline and prompt further selling of the pound, continuing the morning's trend. Conversely, a decrease in U.S. inflation will result in new, more active purchases of the pound, continuing the upward trend. For the intraday strategy, I plan to act based on Scenario 1, ignoring the MACD indicator, as I expect strong and directional movements.
Buy Signal
Scenario 1: Today, I plan to buy the pound when the price reaches around 1.2860 (the green line on the chart), with a target to rise to 1.2903. At 1.2903, I will exit the market and sell the pound in the opposite direction, targeting a 30-35 point movement from that level. You can expect the pound to rise today after weak U.S. statistics. Important: Before buying, ensure that the MACD indicator is above the zero mark and is just beginning its upward movement.
Scenario 2: I also plan to buy the pound today if there are two consecutive tests of the 1.2835 price level, at a time when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. You can expect a rise towards the levels of 1.2860 and 1.2903.
Sell Signal
Scenario 1: I will sell the pound today if the 1.2835 level is breached (the red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be 1.2795, where I will exit the market and buy the pound immediately in the opposite direction, aiming for a 20-25 point movement from that level. Sellers will assert themselves if U.S. inflation data is strong. Important: Before selling, ensure that the MACD indicator is below the zero mark and is just beginning its downward movement.
Scenario 2: I also plan to sell the pound today if there are two consecutive tests of the 1.2860 price level, at a time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. You can expect a decline to the levels of 1.2835 and 1.2795.
What's on the Chart:
- Thin green line: The entry price at which you can buy the trading instrument.
- Thick green line: The presumed price where you can place Take Profit or manually fix profits, as further growth above this level is unlikely.
- Thin red line: The entry price at which you can sell the trading instrument.
- Thick red line: The presumed price where you can place Take Profit or manually fix profits, as further decline below this level is unlikely.
- MACD indicator: When entering the market, it's important to consider the zones of overbought and oversold conditions.
Important: Beginner Forex traders must make very careful decisions about entering the market. It is best to stay out of the market before the release of important fundamental reports to avoid getting caught in sharp price swings. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade with large volumes.
Remember, for successful trading, you must have a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is initially a losing strategy for an intraday trader.
