Trade Analysis and Tips for Trading the British Pound
The test of the 1.3385 price occurred when the MACD indicator was just starting to move down from the zero mark, which confirmed the correct entry point for selling the pound. As a result, the pair fell by more than 30 pips, reaching the test of the target level at 1.3355. I did not buy from it on a rebound at the end of the day, as it was hard to count on a solid rise. Yesterday's figures on the UK's GDP and the current account disappointed, but the pound reacted indifferently to them. Federal Reserve Chief Jerome Powell's speech became the key factor, leading to a major sell-off of the pair. Today, the pound's growth can only be expected following good data related to the Manufacturing PMI in the UK and a speech by the Bank of England's MPC member Huw Pill, who should praise the British economy for its steady growth rates. As for the intraday strategy, I will rely more on implementing Scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the pound when the entry point reaches around 1.3389 (green line on the chart) with a target level of 1.3428 (thicker green line on the chart). Around the 1.3428 level, I plan to exit the buy positions and open sell positions in the opposite direction (aiming for a movement of 30-35 pips in the opposite direction from the level). You can count on the pound's growth to continue in the bullish market. Important! Before buying, ensure the MACD indicator is above the zero mark and starting to rise.
Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.3360 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal of the market upwards. Growth toward the opposite levels of 1.3389 and 1.3428 can be expected.
Sell Signal
Scenario #1: I plan to sell the pound today after it breaks through the 1.3360 level (red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be the 1.3326 level, where I plan to exit the sell positions and immediately open buy positions in the opposite direction (aiming for a movement of 20-25 pips in the opposite direction from the level). Selling the pound can be considered after weak manufacturing activity data. Important! Before selling, make sure the MACD indicator is below the zero mark and just starting to decline.
Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the 1.3389 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal in the market downward. A decline toward the opposite levels of 1.3360 and 1.3326 can be expected.
What's on the Chart:
Thin green line: Entry price at which you can buy the trading instrument.
Thick green line: The anticipated price where you can set Take Profit or manually lock in profits, as further growth above this level is unlikely.
Thin red line: Entry price at which you can sell the trading instrument.
Thick red line: The anticipated price where you can set 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 be guided by overbought and oversold zones.
Important: Novice traders in the forex market should be cautious when making market entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid sudden exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. You can quickly lose your entire deposit without stop orders, especially if you do not use money management and trade in large volumes.
And remember, for successful trading, you need to have a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.
