Trade Analysis and Tips for Trading the British Pound
The price test of 1.3200 occurred when the MACD indicator started to move upward from the zero mark, which confirmed the correct entry point for buying the pound in the development of the upward trend. However, as you can see on the chart, the pair did not actively rise. Yesterday's lack of data on the UK affected market volatility, although it was not as low as before. Today, the levels have been adjusted, and we are looking ahead to retail sales figures from the Confederation of British Industry. Strong data will provide a reason for new purchases of the pound in continuation of the upward trend. In case of weak data, we will continue to trade within the horizontal channel observed throughout yesterday. For the intraday strategy, I will rely more on scenarios No. 1 and 2.
Buy Signal
Scenario No 1: Today, I plan to buy the pound when it reaches the entry point at 1.3200, plotted by the green line on the chart, with the goal of rising to the level of 1.3234, plotted by the thicker green line on the chart. Around 1.3234, I plan to exit long positions and open short positions in the opposite direction, counting on a movement of 30-35 pips from the level. One can count on the pound's strong rise today in continuation of the trend. Important: Before buying, ensure the MACD indicator is above the zero mark and starting to rise from it.
Scenario No 2: I also plan to buy the pound today in case of two consecutive price tests of 1.3178 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 1.3200 and 1.3234.
Sell Signal
Scenario No 1: Today, I plan to sell the pound after testing the level of 1.3178, 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 the level of 1.3149, where I will exit short positions and immediately open long positions in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from that level). It is possible to sell the pound if buyers fail to act near the daily high. Important: 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 1.3200 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 1.3178 and 1.3149.
What's on the Chart:
Thin green line: the entry price at which you can buy the trading instrument.
Thick green line: the estimated price at which you can set Take Profit or manually close positions, 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: an estimated price at which you can place Take Profit or manually close positions, as further decline below this level is unlikely.
MACD indicator: when entering the market, it is essential to be guided by overbought and oversold zones.
Important: Novice traders in the forex market need to be very careful when making decisions about entering 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. You must set stop orders to avoid losing your entire deposit, especially if you don't use money management and trade in large volumes.
Remember, a clear trading plan, like the one I've outlined, is essential for successful trading. Making impulsive decisions based on the current market situation is a losing strategy for novice intraday traders.
