Trade Analysis and Tips for Trading the British Pound
The first price test of 1.3183 occurred when the MACD indicator began its ascent from the zero mark, confirming the correct entry point for buying the pound. As a result, the pair rose by more than 30 pips. Closer to the middle of the day, selling at 1.3162 coincided with the MACD starting its descent from the zero mark, confirming the correct entry point for short positions with a drop in GBP/USD to around 1.3132. This allowed for extracting about another 30 pips of profit from the market. Mixed data from the U.S. labor market were interpreted in favor of buying the U.S. dollar, as the chances of a more substantial rate cut by the Federal Reserve at the upcoming meeting significantly decreased. There is no UK data today, so sellers may exert more significant pressure on the pair as early as the first half of the day. For the intraday strategy, I will rely more on implementing scenarios No. 1 and 2.
Buy Signal
Scenario No 1: Today, I plan to buy the pound when it reaches the entry point around 1.3134, plotted by the green line on the chart, with the goal of rising to the level of 1.3170, plotted by the thicker green line on the chart. I plan to exit long positions at 1.3170 and open short positions in the opposite direction, counting on a movement of 30-35 pips in the opposite direction from the level. A strong rise in the pound today is unlikely. 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 1.3103 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse market upturn. An increase to the opposite levels of 1.3134 and 1.3170 can be expected.
Sell Signal
Scenario No 1: Today, I plan to sell the pound after testing the level of 1.3103, 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 at 1.3069, 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). Selling the pound can sustain the downward trend established at the end of Friday. Important: Before selling, ensure 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 1.3134 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. A decrease to the opposite levels of 1.3103 and 1.3069 can be expected.
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.
