Trade Analysis and Tips for Trading the British Pound
The price test at 1.3137 occurred when the MACD indicator had just started moving upwards from the zero mark, confirming the correct entry point into the market. As a result, the pound rose by only 20 pips, after which pressure on the pair returned. The survey's results on inflation expectations in the UK did not help the pound sustain its growth but did not negatively affect the pair. U.S. data were entirely ignored by traders as well. Today, there are no economic reports from the UK, so buyers will have every chance to continue the upward trend observed since the end of last week. As for the intraday strategy, I will rely more on implementing scenarios No. 1 and 2.
Buy Signal
Scenario No 1: I plan to buy the pound today upon reaching the entry point at the 1.3172 level (green line on the chart) with a target of rising to the 1.3220 level (thicker green line on the chart). Around the 1.3220 level, I intend to exit long positions and open shorts in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the entry point). You can count on the pound's growth to continue the trend, but a strong breakout of the daily high is needed. Important! Before buying, ensure the MACD indicator is above the zero mark and starting to rise.
Scenario No 2: I also plan to buy the pound today in case of two consecutive tests of the 1.3149 level when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. You can expect a rise to the opposite levels of 1.3172 and 1.3220.
Sell Signal
Scenario No 1: Today, I plan to sell the pound after testing the 1.3149 level (red line on the chart), leading to a quick decline in the pair. The key target for sellers will be the 1.3117 level, where I plan to exit short positions and immediately open longs in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Selling the pound is only advisable after a failed attempt to consolidate near the daily high. Important! Before selling, make sure the MACD indicator is below the zero mark and just starting its decline from it.
Scenario No 2: I also plan to sell the pound today in case of two consecutive tests of the 1.3172 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. You can expect a decline to the opposite levels of 1.3149 and 1.3117.
What's on the Chart:
Thin green line: the entry price at which you can buy the trading instrument.
Thick green line: the estimated price at which you can set Take Profit or manually close positions, as further growth above this level is unlikely.
Thin red line: the entry price at which you can sell the trading instrument.
Thick red line: an estimated price at which you can place Take Profit or manually close positions, as further decline below this level is unlikely.
MACD indicator: when entering the market, it is essential to be guided by overbought and oversold zones.
Important: Novice traders in the forex market need to be very careful when making decisions about entering 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. You must set stop orders to avoid losing your entire deposit, especially if you don't use money management and trade in large volumes.
Remember, a clear trading plan, like the one I've outlined, is essential for successful trading. Making impulsive decisions based on the current market situation is a losing strategy for novice intraday traders.
