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Analysis of Trades and Tips for Trading the British Pound
The test of the 1.2872 price occurred when the MACD indicator had moved significantly above the zero mark, limiting the pair's further upward potential. For this reason, I did not buy the pound while the trend was downward, and I was correct. The second test of this price allowed me to enter the market to sell the pound, as the MACD indicator was already in the overbought area and decreasing. As a result, the pair declined by 20 points. Ahead, we have a lot of important data. Expected figures include the core personal consumption expenditures index, changes in consumer spending levels, changes in US household income levels, the University of Michigan consumer sentiment index, and inflation expectations. Weak statistics will lead to a strengthening of the pound and a fall in the dollar. In the case of strong statistics, the pair will continue to decline. Regarding the intraday strategy, I plan to act based on the implementation of Scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the pound upon reaching the entry point around 1.2874 (green line on the chart) with a target of rising to the level of 1.2907 (thicker green line on the chart). At the 1.2907 point, I will exit my buy positions and open sell positions in the opposite direction, expecting a move of 30-35 points from the level. A strong upward movement in the pound today can be expected after weak US data. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting its upward movement from it.
Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.2856 price when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upward. Growth to the target levels of 1.2874 and 1.2907 can be expected.
Sell Signal
Scenario #1: I will sell the pound after the level of 1.2856 (red line on the chart) is updated, which will lead to a quick drop in the pair. The key target for sellers will be the 1.2818 level, where I will exit my sell positions and immediately open buy positions in the opposite direction, expecting a move of 20-25 points from the level. Sellers are expected to become active following a significant correction and strong data. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting its downward movement from it.
Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.2874 price when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline to the target levels of 1.2856 and 1.2818 can be expected.
Chart Details:
Important: Beginner traders on the forex market must make entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp exchange rate fluctuations. If you decide to trade during the release of news, 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 in large volumes.
And remember, successful trading requires a clear trading plan, like the one presented above. Making spontaneous trading decisions based on current market conditions is generally a losing strategy for intraday traders.
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