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The price test of 1.2719 occurred at a time when the MACD indicator had moved significantly below the zero mark, which limited the GBP/USD pair's downward potential. After a short period of time, another price test took place, and it happened when the MACD was in the oversold area, which allowed the second buy scenario to be realized. As a result, the pair rose 20 pips. Yesterday's UK inflation data is unlikely to affect the Bank of England's decision. The central bank is expected to leave the interest rate unchanged. The pound will only react to the Bank's statements and comments regarding future plans and timing of the first rate cut. The closer these dates are, the higher the chances that the pound may fall. A longer period of holding rates unchanged will help GBP/USD rise. As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and 2.
Scenario No. 1. I plan to buy the pound today when GBP/USD reaches the entry point at 1.2717 plotted by the green line on the chart, aiming for growth to 1.2749 plotted by the thicker green line on the chart. In the area of 1.2749, I'm going to close long positions and open short ones in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). You can count on the pound's growth today only after breaching the intraday high and if the Bank of England takes a tough stance. Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario No. 2. I also plan to buy the pound today in case of two consecutive tests of the price of 1.2697 at the time when the MACD indicator is in the oversold area. This will limit the downward potential of the instrument and lead to an upward reversal. We can expect growth to the opposite levels of 1.2717 and 1.2749.
Scenario No. 1. I plan to sell the pound today after testing the level of 1.2697 (the red line on the chart), which will lead to a rapid decline in GBP/USD. The key target for sellers will be 1.2670, where I am going to close short positions and also open long positions in the opposite direction (expecting a movement of 20-25 pips in the upward direction from that level). You can sell the pound after the pair fails to consolidate near the intraday high and if the BoE gives soft statements. 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 tests of 1.2717 at the time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward reversal. We can expect a decline to the opposite level of 1.2697 and 1.2670.
The thin green line is the entry price at which you can buy the trading instrument.
The thick green line is the price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
The thin red line is the entry price at which you can sell the trading instrument.
The thick red line is the price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line: it is important to be guided by overbought and oversold areas when entering the market
Important: Novice traders in the cryptocurrency market need to be very cautious when making decisions 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. Without setting stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade with large volumes.
Remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I presented above. Spontaneously making trading decisions based on the current market situation is inherently 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.
