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The price test of 1.2697 occurred when the MACD indicator was just starting to fall from the zero mark, which confirmed the correct entry point to sell the pound. As a result, the GBP/USD pair fell by more than 30 pips. The pound fell after the Bank of England held interest rates unchanged and issued guidance. Policymakers clearly indicated that if inflation shows a positive trend, rates in the UK could be cut as early as August this year. This is bad news for pound buyers, who have been facing many problems lately. Today, these challenges could escalate. This could be due to weak data on the Business Activity Indexes in the manufacturing and services sectors of the UK. In addition, reports on the UK Composite PMI and data on retail sales volume excluding fuel costs are being released. Only very good data can help the pound overcome its problems. As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and 2.
Scenario No 1. Today, I plan to buy the pound when the price reaches around 1.2675 plotted by the green line on the chart, aiming for a rise to the level of 1.2704 plotted by the thicker green line on the chart. Around 1.2704, I plan to exit the long positions and sell the pound in the opposite direction, counting on a movement of 30-35 pips from the entry point. You can count on the pound to rise today, after good PMI data. 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 at 1.2653 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 1.2675 and 1.2704.
Scenario No 1. Today, I plan to sell the pound after it tests the level of 1.2653 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 1.2615, 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 opposite direction from that level). You can sell the pound after it fails to consolidate around the intraday high and if the UK reports turn out to be weak. 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 1.2675 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 1.2653 and 1.2615.
The thin green line is the entry price at which you can buy the trading instrument.
The thick green line is the estimated price where you can set Take-Profit (TP) or manually close positions, 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 close positions, 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 forex market need to be very careful 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 in large volumes.
And 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.
