Overview of trading and tips on GBP/USD
The price test of 1.2971 in the second half of the day occurred when the MACD indicator had sharply moved up from the zero mark, which limited the pair's potential to rise. For this reason, I did not buy the pound. GBP/USD fell after an upbeat US retail sales report and a price test of 1.2938 followed, which is where I advised you to rely on scenario No. 2 for buying the pound. As a result, the rebound amounted to more than 20 pips. Today, the UK inflation data for June will warrant investor attention. The following series of indicators are expected: Consumer Price Index, Producer Price Index and Retail Price Index. If the data coincide with economists' forecasts, most likely the pair will continue to trade within the channel with the bulls having a pretty good advantage. As for the intraday strategy, I will rely more on the implementation of scenario No. 1 and 2.
Buy signals
Scenario No 1. Today, I plan to buy the pound when the price reaches the entry point around 1.2980 plotted by the green line on the chart, aiming for a rise to the level of 1.3006 plotted by the thicker green line on the chart. Around 1.3006, I plan to exit the long positions and sell the pound in the opposite direction, counting on a movement of 30-35 pips from the level. We don't expect the pound to rise in the first half of the day after news about rising inflation. Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario No 2. I also plan to buy the pound today in case of two consecutive tests of the price at 1.2964 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse market upturn. One can expect growth to the opposite levels of 1.2980 and 1.3006.
Sell signals
Scenario No 1. Today, I plan to sell the pound after testing the level of 1.2964 plotted by the red line on the chart, which will lead to a rapid decline in GBP/USD. The key target for sellers will be 1.2938, where I am going to close short positions and also open long positions in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from that level). You can sell the pound if buyers are not active in the area of the intraday high. Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario No 2. I also plan to sell the pound today in case of two consecutive price tests of 1.2980 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. One can expect a decline to the opposite levels of 1.2964 and 1.2938.
What's on the chart:
The thin green line is the entry price at which you can buy the trading instrument.
The thick green line is the estimated price where you can set Take-Profit (TP) or manually close positions, as further growth above this level is unlikely.
The thin red line is the entry price at which you can sell the trading instrument.
The thick red line is the price where you can set Take-Profit (TP) or manually close positions, as further decline below this level is unlikely.
MACD line: it is important to be guided by overbought and oversold areas when entering the market
Important: Novice traders in the forex market need to be very careful when making decisions 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 price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade in large volumes.
And remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I presented above. Spontaneously making trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.
