Analysis of Deals and Trading Tips for the British Pound
The price test at 1.3179 occurred when the MACD indicator had moved significantly below the zero mark, limiting the downside potential of the pair. For this reason, I did not sell the pound. The second test at 1.3179 coincided with the MACD being in the oversold area, leading to the implementation of Scenario #2 to buy the pound and realize losses, as the pair did not rise.
Expectations of a more cautious stance from the US Federal Reserve regarding interest rates only increased demand for the US dollar. The British pound seemed unable to find support amid the rapid strengthening of the American currency. The decision made by the Fed's Open Market Committee the day before indicated that the central bank is ready to wait for the release of fresh fundamental data before making further decisions. This reassessment of monetary policy prospects led to a strengthening of the dollar and increased pressure on risk assets.
This morning, the release of the UK house price index from Nationwide is expected, which will generate increased interest among experts and investors closely analyzing the economic situation in the country. The housing market is considered a sensitive barometer of national economic health, reflecting consumer sentiment and prospects for economic growth. The upcoming Nationwide report is particularly significant in light of current instability caused by inflationary pressure, interest rates, and geopolitical factors. An increase in housing prices may indicate the resilience of the economy and consumer activity, while a decline in indicators may signal a slowdown in economic development and a likely recession. If the data indicates stability in the housing market, the regulatory authority may continue a wait-and-see policy to curb inflation.
As for the intraday strategy, I will rely more on the implementation of scenarios #1 and #2.
Buying Scenarios
Scenario #1: I plan to buy the pound today when the entry point reaches around 1.3161 (green line on the chart), to rise to 1.3190 (thicker green line on the chart). Near 1.3190, I intend to exit the long positions and open shorts in the opposite direction (aiming for a movement of 30-35 pips in the opposite direction from the level). Growth in pounds today can only be expected within the framework of a correction. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning an upward move from it.
Scenario #2: I also plan to buy the pound today in case the price tests 1.3144 twice, as the MACD indicator is in the oversold area. This will limit the downside potential of the pair and lead to a market reversal upwards. An increase to the opposite levels of 1.3161 and 1.3190 can be expected.
Selling Scenarios
Scenario #1: I plan to sell the pound today after a break of the level at 1.3144 (red line on the chart), which will lead to a rapid decline of the pair. The key target for sellers will be the 1.3120 level, where I intend to exit the shorts and immediately buy back (aiming for a move of 20-25 pips in the opposite direction from the level). Pound sellers may return to the market at any moment. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning its downward movement.
Scenario #2: I also plan to sell the pound today if the price tests 1.3161 twice in a row while the MACD indicator is in the overbought area. This will limit the upside potential of the pair and lead to a market reversal downwards. A decline to the opposite levels of 1.3144 and 1.3120 can be expected.
What is on the Chart:
Thin green line – entry price for buying the trading instrument;
Thick green line – estimated price where Take Profit can be placed or profits can be secured, as further growth above this level is unlikely.
Thin red line – entry price for selling the trading instrument;
Thick red line – estimated price where Take Profit can be placed or profits can be secured, as further decline below this level is unlikely;
MACD indicator. When entering the market, it is essential to rely on the overbought and oversold zones.
Important. Beginner traders in the Forex market need to be very cautious when making entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid sudden exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember, for successful trading, you need a clear trading plan, similar to the one I presented above. Spontaneous trading decisions based on the current market situation are fundamentally a losing strategy for intraday traders.
