Analysis of trades and tips for trading the British pound
The price touched 1.3112 as the MACD indicator started to rise from the zero line, confirming a valid entry point to buy the pound. As a result, the pair rose by 20 points before the movement ended. The absence of statistics allowed buyers to reach a new weekly high, but tomorrow's Fed meeting is dampening the desire of major players to open new long positions on the pound. In the second half of the day, data on retail sales and industrial production is expected, along with a speech from FOMC member Lorie K. Logan. It is unlikely that the Fed representative will say anything new—especially ahead of tomorrow's central bank meeting. As for the intraday strategy, I plan to act according to scenarios #1 and #2.
Buy signal
Scenario #1: Today, I plan to buy the pound when the entry point at 1.3225 is reached (green line on the chart), targeting a rise to the 1.3257 level (thicker green line on the chart). Around 1.3257, I will exit the buy positions and open sell positions in the opposite direction, expecting a movement of 30-35 points lower from the level. Today, the pound's growth can be expected within the framework of the upward trend and after weak U.S. data. Note: Before buying, ensure the MACD indicator is above the zero line and just starting to rise from it.
Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the 1.3199 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 toward the 1.3225 and 1.3257 levels can be expected.
Sell signal
Scenario #1: I plan to sell the pound today after the 1.3199 level is updated (red line on the chart), which will lead to a quick drop in the pair. The key target for sellers is 1.3161, where I will exit the sell positions and immediately open buy positions targeting a 20-25 point upward move. Sellers are likely to emerge if the U.S. data is strong. Note: Before selling, ensure the MACD indicator is below the zero line and just starting to fall from it.
Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the 1.3225 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 decline toward the 1.3199 and 1.3161 levels 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 where you can place Take Profit or manually lock in 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 estimated price where you can place Take Profit or manually lock in profits, as further decline below this level is unlikely.
- MACD indicator: When entering the market, it is important to use overbought and oversold zones as a guide.
Important: Beginner traders in the forex market need to make careful decisions when entering the market. It is best to avoid entering the market before major fundamental reports to avoid exposure to sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you could quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.
And remember, successful trading requires a clear trading plan, like the one I have outlined above. Spontaneous decision-making based solely on the current market situation is inherently a losing strategy for intraday traders.
