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Trade Analysis and Tips for Trading the British Pound
The test of the price at 1.2488 in the first half came at a moment when the MACD indicator had risen significantly above the zero mark, limiting the further upward potential of the pair. For this reason, I did not buy, as it was not advisable to rely heavily on reports from the UK. I didn't see any other market entry signals. Ahead are the figures for changes in GDP volume for the first quarter of this year in the US, and quite good indicators could bring pressure back to the British pound, leading to a major sell-off. Also, pay attention to data on the balance of trade in goods and changes in the volume of pending home sales. However, the GDP report will be the key event. As for the intraday strategy, I will rely more on scenario #1, even despite the MACD indicator readings, as I expect strong and directional movement.
Buy Signal
Scenario #1: Today, I plan to buy the pound when the entry point reaches around 1.2522 (green line on the chart), with a target of rising to the level of 1.2589 (thicker green line on the chart). At around 1.2589, 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). Pound growth today can only be expected after weak US GDP data within an upward correction. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario #2: Today, I also plan to buy the pound in case of two consecutive tests of the price at 1.2491, at a moment when the MACD indicator is in the oversold zone. This will limit the downward potential of the pair and lead to a reversal of the market upward. We can expect growth towards the opposite levels of 1.2522 and 1.2589.
Sell Signal
Scenario #1: Today, I plan to sell the pound after the level of 1.2491 is updated (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 1.2428, where I will exit sales and also open purchases immediately in the opposite direction (expecting a movement of 20–25 points in the opposite direction from the level). Sellers will show themselves in the case of strong US reports. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decrease from it.
Scenario #2: Today, I also plan to sell the pound in case of two consecutive tests of the price at 1.2522, at a moment when the MACD indicator is in the overbought zone. This will limit the upward potential of the pair and lead to a reversal of the market downward. We can expect a decline towards the opposite levels of 1.2491 and 1.2428.
What's on the chart:
Thin green line - entry price, at which you can buy the trading instrument;
Thick green line - the expected price, where you can set Take Profit or independently take profit, as further growth above this level is unlikely;
Thin red line - entry price, at which you can sell the trading instrument;
Thick red line - the expected price, where you can set Take Profit or independently take profit, as further decline below this level is unlikely;
MACD indicator. When entering the market, it's important to consider overbought and oversold zones.
Important. Beginner traders in the Forex market need to be very careful when making decisions to enter the market. It's best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp exchange rate fluctuations. If you decide to trade during news releases, always set 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 with large volumes.
And remember that successful trading requires a clear trading plan, like the one 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.
