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Analysis of trades and tips on on GBP/USD
The price test of 1.2810 occurred when the MACD indicator had moved significantly upward from the zero mark, limiting the pair's further upward potential. For this reason, I did not buy the pound and made the wrong decision. The U.S. producer price data allowed the pound to sustain its growth in the afternoon, resulting in a decent upward move toward the target level of 1.2872. Today, traders should pay attention to the UK Consumer Price Index and Retail Price Index. Weak readings indicating a decrease in price pressure will likely lead to a decline in the pair during the first half of the day. Major players will undoubtedly take advantage of this, betting on further gains in the pound after a similarly weak U.S. report, which we will discuss in more detail in the forecast for the American session. As for the intraday strategy, I will rely more on implementing scenarios No. 1 and 2.
Buy signals
Scenario No 1. Today, I plan to buy the pound when the price reaches the entry point in the area of 1.2873, plotted by the green line on the chart, with the goal of rising to 1.2918, plotted by the thicker green line on the chart. In the area of 1.2918, I plan to exit long positions and sell the pound in the opposite direction, counting on a movement of 30-35 pips from the level. You can count on the pound's strong rise today after news about rising inflation in the UK. 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 if the price at 1.2845 is tested twice consecutively 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 1.2873 and 1.2918.
Sell signals
Scenario No 1. Today, I plan to sell the pound after testing 1.2845 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 1.2803, 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). You can sell the pound if buyers fail near the intraday high or weak inflation data. Important: Before selling, make sure 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 1.2873 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 1.2845 and 1.2803.
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 must be cautious when deciding to enter 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.
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