Analysis of trades and tips on on GBP/USD
The price test of 1.2785 occurred when the MACD indicator had moved significantly up from the zero mark, which limited the further upward potential of the pair towards the end of the week. For this reason, I did not buy the pound. Unfortunately, it never came to the point of a re-test to implement the sell scenario. Today, the pound surprisingly grew on weak labor market data. Data on changes in the number of applications for unemployment benefits in the UK for July have already been released, where the number of applications increased by 135,000. Meanwhile, the unemployment rate in the UK fell to 4.2% in June. The bulls' reaction to this data is surprising, so in the first half of the day, it is better to act on long positions on the pound by focusing more on scenario No. 2.
Buy signals
Scenario No 1. Today, I plan to buy the pound when the price reaches the entry point around 1.2827, plotted by the green line on the chart, with the goal of rising to 1.2872, plotted by the thicker green line on the chart. In the area of 1.2872, I plan to exit long positions and sell the pound in the opposite direction, counting on a movement of 30-35 pips from the level. You can count on the pound's strong rise today in continuation of the morning trend. Important: Before buying, ensure the MACD indicator is above the zero mark and starting to rise from it.
Scenario No 2. I also plan to buy the pound today if the price at 1.2774 is tested twice consecutively 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 1.2827 and 1.2872.
Sell signals
Scenario No 1. Today, I plan to sell the pound after testing 1.2774 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 1.2722, where I will exit short positions and immediately 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 fail near the intraday high. Important: 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 1.2827 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 1.2774 and 1.2722.
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 must be cautious 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 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.
