Trade Analysis and Tips for Trading the British Pound

The first price test of 1.3173 occurred when the MACD indicator started moving up from the zero mark, confirming it as the correct entry point for buying the pound. However, the pair failed to demonstrate the expected growth, resulting in losses. Yesterday, PMI data for the UK construction sector and a weak US ADP report on employment helped the pound, but a significant upward trend did not materialize. It is unlikely to happen today in the first half of the day either, as the anticipated report on the house price index from HBOS UK does not carry as much weight as the US unemployment rate, which we will discuss in more detail in the forecast for the second half of the day. I expect trading within a horizontal channel. For the intraday strategy, I will rely more on scenario No. 2.

Buy Signal

Scenario No 1: Today, I plan to buy the pound when it reaches the entry point at 1.3189, plotted by the green line on the chart, with the goal of rising to the level of 1.3216, plotted by the thicker green line on the chart. In the area of 1.3216, I plan to exit long positions and open short positions in the opposite direction, counting on a movement of 30-35 pips in the opposite direction from the level. It's unlikely that we can count on a strong rise in the pound today. Important: Before buying, ensure the MACD indicator is above the zero mark and starting to rise from it.

Scenario No 2: I also plan to buy the pound today in case of two consecutive price tests of 1.3168 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse market upturn. One can expect growth to the opposite levels of 1.3189 and 1.3216.

Sell Signal

Scenario No 1: Today, I plan to sell the pound after testing the level of 1.3168, plotted by the red line on the chart, which will lead to a rapid decline in GBP/USD. The key target for sellers will be the level of 1.3142, where I will exit short positions and immediately open long positions in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from that level). Selling the pound should only be considered after weak data. Important: Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario No 2: I also plan to sell the pound today in case of two consecutive price tests of 1.3189 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. One can expect a decline to the opposite levels of 1.3168 and 1.3142.

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 at which you can set Take Profit or manually close positions, 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: an estimated price at which you can place Take Profit or manually close positions, as further decline below this level is unlikely.

MACD indicator: when entering the market, it is essential to be guided by overbought and oversold zones.

Important: Novice traders in the forex market need to be very careful when making decisions about entering the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You must set stop orders to avoid losing your entire deposit, especially if you don't use money management and trade in large volumes.

Remember, a clear trading plan, like the one I've outlined, is essential for successful trading. Making impulsive decisions based on the current market situation is a losing strategy for novice intraday traders.