20.05.202417:06 Forex Analysis & Reviews: GBP/USD: Simple trading tips for novice traders for May 20th (US session)

Trade analysis and tips for trading the British pound

The first test of the 1.2692 price occurred when the MACD indicator had already dropped significantly below the zero mark, limiting the pair's further downward potential. For this reason, I did not sell and instead waited for the implementation of Scenario 2 for buying. After a short period, another test of 1.2692 occurred when the MACD was already in the oversold area, allowing entry to buy the pound. After that, the pair recovered by almost 20 points. Again, the lack of UK statistics did not favor the pound, although buyers managed to hold daily lows. Besides the speeches from Federal Reserve representatives, nothing interesting is expected during the US session, so it is best to bet on further declines in GBP/USD. Any comments from the Fed about inflation will be interpreted in favor of buying the dollar. As for the intraday strategy, I plan to act based on implementing Scenarios 1 and 2.

Buy Signal

Scenario 1: Today, I plan to buy the pound upon reaching the entry point around 1.2712 (green line on the chart) with a target of rising to the 1.2746 level (thicker green line on the chart). At around 1.2746, I will exit purchases and open sales in the opposite direction (aiming for a movement of 30–35 points in the opposite direction from the level). Today, you can expect the pound to rise only within a sideways channel. 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 in case of two consecutive tests of the 1.2689 price when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. You can expect a rise to the opposite levels of 1.2712 and 1.2746.

Sell Signal

Scenario 1: Today, I plan to sell the pound after the level of 1.2689 is updated (red line on the chart), leading to a rapid decline in the pair. The key target for sellers will be the 1.2655 level, where I will exit sales and immediately open purchases in the opposite direction (aiming for a movement of 20–25 points in the opposite direction from the level). Sellers will show themselves in cases of low activity around the daily maximum at the upper boundary of the sideways channel. Important! Before selling, please make sure the MACD indicator is below the zero mark and starting to decline from it.

Scenario 2: I also plan to sell the pound today in case of two consecutive tests of the 1.2712 price when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. You can expect a decline to the opposite levels of 1.2689 and 1.2655.

Chart Explanation:

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: Estimated price for setting Take Profit or manually fixing profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: Estimated price for setting Take Profit or manually fixing profits, as further decline below this level is unlikely.
• MACD Indicator: Following overbought and oversold zones is important when entering the market.

Important: Beginner traders in the forex market should be cautious when making entry decisions. To avoid sharp price fluctuations, it is best to stay out of the market before important fundamental reports are released. 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.

Remember, successful trading requires a clear plan like the one presented above. Spontaneous trading decisions based on the current market situation are a losing strategy for intraday traders.