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Trade analysis and tips for trading the British pound
The test of the price at 1.2648 in the first half of the day occurred when the MACD had already risen significantly from the zero mark, limiting the further downward potential of the pair. For this reason, I did not buy the pound. After some time, another similar test took place, and the MACD started to move up from the zero mark, allowing entry into the market, but a significant upward movement did not materialize. About 10 points and demand for the pound decreased. Now, much depends on US statistics: changes in durable goods orders, the housing price index, and the consumer confidence indicator will determine the direction of the pair during the American session. Weak data is a reason to sell the dollar further and buy the pound as part of a correction capable of turning into a trend, while strong reports can significantly harm the pound. As for the intraday strategy, I will rely more on scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the pound when the entry point reaches around 1.2671 (green line on the chart) with a target for growth to the level of 1.2710 (thicker green line on the chart). At 1.2710, I will exit purchases and open sales in the opposite direction (expecting a movement of 30–35 points in the opposite direction from the level). The rise of the pound today can be expected only after weak US data and a successful breakthrough of the daily maximum. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the price at 1.2652 when the MACD indicator is in the oversold area. This will limit the downward potential of the pair and lead to an upward market reversal. Expect a rise to the opposite levels of 1.2671 and 1.2710.
Sell Signal
Scenario #1: Today, I plan to sell the pound after updating the level of 1.2652 (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 1.2622, where I will exit sales and also open purchases in the opposite direction (expecting a movement of 20–25 points in the opposite direction from the level). Sellers will show themselves only against the backdrop of strong US consumer confidence data. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the price at 1.2671 when the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a downward market reversal. Expect a decline to the opposite levels of 1.2652 and 1.2622.
On the Chart:
Thin green line - entry price for buying the trading instrument.
Thick green line - the expected price where you can set Take Profit or manually take profits, as further growth above this level is unlikely.
Thin red line - entry price for selling the trading instrument.
Thick red line - expected price where you can set Take Profit or manually take profits, as further decline below this level is unlikely.
MACD indicator. When entering the market, it is important to follow the overbought and oversold zones.
Important. Beginner traders in the forex market should be very cautious when making entry decisions. It's best to stay out of the market before major fundamental reports to avoid being caught in sharp exchange rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You need to set stop orders to lose your entire deposit quickly, especially if you don't use money management and trade large volumes.
And remember, successful trading requires a clear trading plan, like the one I 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.
