03.12.202406:50 Forex Analysis & Reviews: GBP/USD: Simple Trading Tips for Beginner Traders on December 3 – Analysis of Yesterday's Forex Trades

Analysis of Trades and Trading Recommendations for the British Pound

The test of the 1.2695 price level occurred when the MACD indicator had just started moving downward from the zero mark. This confirmed the correct entry point for selling the pound, resulting in a 30-pip drop to the target level of 1.2662.

Optimistic data on U.S. manufacturing activity pushed the pound even lower, and given the challenges currently facing the UK, the prospect of a significant recovery seems unlikely. In recent months, the pound has seen substantial declines, highlighting the growing economic difficulties in the UK. Weak growth in UK manufacturing activity further hampers the British currency. The pound faces significant obstacles amid high inflation and uncertainty surrounding future monetary policy. Market participants will likely remain cautious, awaiting further economic data and updates on the Bank of England's policy direction, adding to the uncertainty.

Today, there are no economic data from the UK, so if the pair shows intraday growth, it would likely occur in the first half of the day. I plan to rely on Scenario #1 and Scenario #2 for intraday strategies.

Buy Scenarios

Scenario #1:

I plan to buy the pound today if the entry point at 1.2660 (green line on the chart) is reached, targeting growth to 1.2685 (thicker green line on the chart). At 1.2685, I plan to exit the buy positions and open sell positions in the opposite direction, aiming for a 30–35-pip downward movement from the level. Growth in the pound today should be viewed as part of a correction.

Important! Before buying, ensure the MACD indicator is above the zero mark and starting to rise.

Scenario #2:

I also plan to buy the pound today if the price level of 1.2636 is tested twice consecutively, provided the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger an upward market reversal. Growth can be expected to the opposing levels of 1.2660 and 1.2685.

Sell Scenarios

Scenario #1:

I plan to sell the pound after breaking below the 1.2636 level (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be 1.2609, where I plan to exit the sell positions and immediately open buy positions in the opposite direction, aiming for a 20–25 pip upward movement from the level. Selling the pound is possible, but it's best to do so from as high as possible.

Important! Before selling, ensure the MACD indicator is below the zero mark and starting to decline.

Scenario #2:

I also plan to sell the pound today if the price level of 1.2660 is tested twice consecutively, provided the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline can be expected to the opposing levels of 1.2636 and 1.2609.

What's on the Chart:

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
• MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Notes for Beginner Forex Traders:

• Always approach market entry decisions cautiously.
• Avoid trading during major news releases to sidestep volatile price swings.
• If trading during news releases, always set stop-loss orders to minimize losses.
• Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
• A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.