Analysis of Trades and Tips for Trading the British Pound
When the 1.3054 price level was tested, the MACD indicator had already moved significantly upward from the zero level, limiting the pair's potential for further gains. A second test of this price shortly afterward, with the MACD in the overbought zone, triggered the execution of Scenario #2 for selling the pound, resulting in a 15-point drop at the time of writing. In the second half of the day, we are expecting a series of key economic reports. It will start with the weekly initial jobless claims and end with the U.S. Producer Price Index (PPI) data for August. Low inflation will weaken the dollar, while high figures could further push GBP/USD down. Regarding the intraday strategy, I plan to follow Scenario #1, despite the MACD indicator's readings, as I expect a strong and clear directional movement in the pair.
Buy Signal
Scenario #1: Today, I plan to buy the pound when the entry point reaches around 1.3060 (green line on the chart), aiming for a rise to the 1.3104 level (thicker green line on the chart). At 1.3104, I will exit the purchases and open short positions, expecting a 30-35 point movement in the opposite direction from the level. The pound's rise can be expected today after weak U.S. data. Important: Before buying, ensure that the MACD indicator is above the zero level and just beginning to rise from it.
Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.3032 price level when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upward. A rise to the opposite levels of 1.3060 and 1.3104 can be expected.
Sell Signal
Scenario #1: I plan to sell the pound after breaking below the 1.3032 level (red line on the chart), which should lead to a quick decline. The key target for sellers will be 1.2984, where I will close my short positions and immediately open long positions (expecting a 20-25 point movement in the opposite direction from the level). Sellers are likely to appear if strong statistics are released. Important: Before selling, ensure that the MACD indicator is below the zero level and just beginning to fall from it.
Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.3060 price level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. A drop to the opposite levels of 1.3032 and 1.2984 can be expected.
What is shown on the chart:
- Thin green line – the price at which the trading instrument can be bought;
- Thick green line – the assumed price where Take Profit can be set, or profits can be manually fixed, as further growth above this level is unlikely;
- Thin red line – the price at which the trading instrument can be sold;
- Thick red line – the assumed price where Take Profit can be set, or profits can be manually fixed, as further decline below this level is unlikely;
- MACD Indicator – When entering the market, it's essential to consider overbought and oversold zones.
Important: Beginner traders in the Forex market need to be very cautious when making decisions to enter the market. Before major fundamental reports are released, it's best to stay out of the market to avoid sharp price swings. If you decide to trade during news releases, always set stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you don't use money management and trade in large volumes.
And remember, for successful trading, you need a clear trading plan, like the one outlined above. Making spontaneous trading decisions based on the current market situation is a fundamentally losing strategy for intraday traders.
