Trade Analysis and Tips for Trading the British Pound
The test of the 1.3206 price level occurred when the MACD indicator was just beginning to move downward toward zero, confirming the correct entry point for selling the pound. This resulted in a drop to around 1.3172, where buying on the bounce yielded about 25 points in profit. The afternoon is packed with events: initial jobless claims and the change in U.S. GDP for Q2 will heat up the market, followed by an important speech from FOMC member Raphael Bostic. Yesterday's statements from some Fed representatives weakened the dollar's position, which is something to keep in mind. For the intraday strategy, I plan to act based on scenarios #1 and #2.
Buy Signal
Scenario #1: I plan to buy the pound today if the price reaches around 1.3205 (green line on the chart), targeting a rise to the 1.3256 level (thicker green line on the chart). At 1.3256, I will exit the purchases and open sales in the opposite direction (targeting a move of 30-35 points in the opposite direction from the level). A rise in the pound today can only be expected after weak U.S. statistics. It's important to note: Before buying, make sure that the MACD indicator is above zero and is just beginning its rise.
Scenario #2: I also plan to buy the pound today if the price tests 1.3179 twice while the MACD indicator is in the oversold area. This will limit the pair's downward potential and could trigger an upward reversal. We can expect a rise to the opposite levels of 1.3205 and 1.3256.
Sell Signal
Scenario #1: I plan to sell the pound today after the level of 1.3179 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 1.3136 level, where I will close the short positions and immediately open long positions in the opposite direction (targeting a move of 20-25 points in the opposite direction from the level). Sellers will make their move if there is no significant activity around the 1.3205 level. It's important to note: Before selling, make sure that the MACD indicator is below zero and is just beginning its decline.
Scenario #2: I also plan to sell the pound today if the price tests 1.3205 twice while the MACD indicator is in the overbought area. This will limit the pair's upward potential and could trigger a downward reversal. We can expect a decline to the opposite levels of 1.3179 and 1.3136.
Chart Indicators:
Thin Green Line: Entry price for buying the trading instrument.
Thick Green Line: Target price where you can set Take Profit or manually lock in profits, as further gains above this level are unlikely.
Thin Red Line: Entry price for selling the trading instrument.
Thick Red Line: Target price where you can set Take Profit or manually lock in profits, as further declines below this level are unlikely.
MACD Indicator: When entering the market, it is important to be guided by the overbought and oversold zones.
Important: Beginners in the forex market need to be very cautious when deciding to enter the market. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp price swings. If you choose to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you are trading large volumes without proper money management.
Remember, for successful trading, you need a clear trading plan, like the one I have presented above. Making spontaneous trading decisions without a solid strategy is an inherently losing approach for intraday traders.
