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Trade Analysis and Tips for Trading the British Pound
The price test at 1.3158 occurred when the MACD indicator started moving downward from the zero mark, confirming the correct entry point for selling the pound. Consequently, the pair fell by more than 60 pips. Strong U.S. data—especially regarding the labor market—provoked a pound sell-off and led to another update of the weekly low, maintaining the downward trend. Today's report on the UK Halifax house price index is unlikely to help the pound recover, so it is better to act in line with the trend, but I will look for suitable entry points as high as possible. As for the intraday strategy, I will focus more on implementing scenarios No. 1 and No. 2.
Buy Signal
Scenario No. 1: I plan to buy the pound today when it reaches the entry point at 1.3130 (green line on the chart), with the target for growth to the level of 1.3175 (thicker green line on the chart). At around 1.3175, I intend to exit my purchases and open sales in the opposite direction (aiming for a movement of 30-35 pips in the opposite direction from the level). You can expect the pound to rise only with outstanding data. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning to rise.
Scenario No. 2: I also plan to buy the pound today if the price at 1.3104 is tested twice consecutively when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upward. You can expect growth to the opposing levels of 1.3130 and 1.3175.
Sell Signal
Scenario No. 1: I plan to sell the pound today after the level of 1.3104 is tested (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the level of 1.3063, where I intend to exit my sales and open purchases immediately in the opposite direction (aiming for a movement of 20-25 pips in the opposite direction from the level). You can sell pounds as part of the ongoing bear market. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning to decline.
Scenario No. 2: I also plan to sell pounds today if the price at 1.3130 is tested twice consecutively when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. You can expect a decrease to the opposing levels of 1.3104 and 1.3063.
What's on the Chart:
Thin green line: Entry price at which you can buy the trading instrument.
Thick green line: The anticipated price where you can set Take Profit or manually lock in profits, as further growth above this level is unlikely.
Thin red line: Entry price at which you can sell the trading instrument.
Thick red line: The anticipated price where you can set Take Profit or manually lock in profits, as further decline below this level is unlikely.
MACD Indicator: When entering the market, it is important to be guided by overbought and oversold zones.
Important: Novice traders in the forex market should be cautious when making market entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid sudden exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. You can quickly lose your entire deposit without stop orders, especially if you do not use money management and trade in large volumes.
And remember, for successful trading, you need to have a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.
InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.
