Review of Trades and Trading Tips for the British Pound
The test of the 1.3584 price level occurred when the MACD indicator was just beginning to move downward from the zero line, confirming the validity of the entry point for selling the pound. As a result, the pair declined toward the target level of 1.3568.
In the second half of the day, the U.S. agenda will determine the pound's direction, as there are no significant domestic catalysts for the British currency, while weekly initial jobless claims and the goods trade balance will be in focus. Jobless claims reflect the current state of the labor market, while the trade balance shows the difference between goods exports and imports, but such releases usually do not trigger a significant reaction in the currency market. Under these conditions, the pound becomes dependent on external factors. Strong labor-market data could support the dollar and weigh on GBP/USD, while an increase in the number of claims would weaken the U.S. currency and support the pound. However, given the secondary importance of these data, sharp fluctuations should not be expected unless the figures differ significantly from the forecast.
As for the intraday strategy, I will focus more on the implementation of Scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the pound when the entry point around 1.3583 is reached (the green line on the chart), with a target of rising to 1.3602 (the thicker green line on the chart). Around 1.3602, I will exit the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. The pound can be expected to rise today only after weak U.S. data. Important! Before buying, make sure that the MACD indicator is above the zero line and has only just begun to rise from it.
Scenario #2: I also plan to buy the pound today if the price tests 1.3571 twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal higher. A rise toward the opposite levels of 1.3583 and 1.3602 can be expected.
Sell Signal
Scenario #1: Today, I plan to sell the pound after the 1.3571 level is broken (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 1.3555, where I will exit the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Strong pressure on the pound will return today following strong data. Important! Before selling, make sure that the MACD indicator is below the zero line and has only just begun to decline from it.
Scenario #2: I also plan to sell the pound today if the price tests 1.3583 twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal lower. A decline toward the opposite levels of 1.3571 and 1.3555 can be expected.
What Is Shown on the Chart:
- Thin green line – the entry price at which the trading instrument can be bought;
- Thick green line – the expected price at which Take Profit can be placed or profits can be taken manually, as further growth above this level is unlikely;
- Thin red line – the entry price at which the trading instrument can be sold;
- Thick red line – the expected price at which Take Profit can be placed or profits can be taken manually, as further decline below this level is unlikely;
- MACD indicator. When entering the market, it is important to take the overbought and oversold zones into account.
Important. Beginner Forex traders need to be very cautious when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp exchange-rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large positions.
And remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is a losing strategy for an intraday trader from the outset.
