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Trade analysis and tips for trading the British pound
I did not test the levels I indicated in the first half of the day. The pound's rise after good GDP and industrial production data from the UK quickly ended, barely getting started. As a result, I did not see the continuation of the upward trend formed after yesterday's Bank of England meeting. In the second half of the day, we expect some very interesting figures on the University of Michigan Consumer Sentiment Index and inflation expectations from the University of Michigan. Most likely, the dollar will react with growth to the data, increasing pressure on the pound, which is not in demand today. I will count on a more active session with the formation of suitable entry points. As for the intraday strategy, I plan to act based on the realization of scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the pound when the entry point reaches around 1.2537 (green line) to rise to 1.2565 (thicker green line on the chart). At around 1.2565, I will exit purchases and open sales in the opposite direction (targeting a movement of 30-35 points in the opposite direction from the level). Today, the pound's rise can only be expected after weak US statistics. Important! Before buying, ensure that the MACD indicator is above the zero mark and starting to rise.
Scenario #2: I also plan to buy the pound today in the event of two consecutive tests of the price at 1.2522 when the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to an upward reversal in the market. Expect growth towards the opposite levels of 1.2537 and 1.2565.
Sell Signal
Scenario #1: Today, I plan to sell the pound after updating the level of 1.2522 (red line on the chart), leading to a rapid decline in the pair. The key target for sellers will be the level of 1.2500. I will exit sales and immediately open purchases in the opposite direction (targeting a movement of 20–25 points in the opposite direction from the level). Sellers will show themselves in case of a lack of activity near the daily high. Important! Before selling, make sure that the MACD indicator is below the zero mark and just starting its decline from it.
Scenario #2: I also plan to sell the pound today in the event of two consecutive price tests at 1.2537 when the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a market reversal downward. Expect a decrease towards the opposite levels of 1.2522 and 1.2500.
On the chart:
Thin green line - entry price, at which the trading instrument can be bought.
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 at which the trading instrument can be sold.
Thick red line - the 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 consider overbought and oversold zones.
Important. Beginner traders in the Forex market should be very careful when deciding 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 exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. You must set stop orders to avoid losing your entire deposit, especially if you don't use money management and trade large volumes.
And remember that successful trading requires a clear trading plan, like the one I presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.
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