Analysis of transactions and trading advice for the British pound
The first test of the price at 1.2515 occurred at a time when the MACD indicator had descended significantly from the zero mark, limiting the further downward potential of the pair. For this reason, I did not sell and instead waited for a retest to execute scenario #2 for buying. Shortly after that, the update at 1.2515 at a moment when the MACD was in oversold territory, allowed the buy signal to materialize, but by the time of writing the article, significant growth of the pair had not occurred. Therefore, I exited the market to await more clarity after the US data. Ahead of us are figures on the weekly number of initial claims for unemployment benefits, the balance of trade, changes in labor productivity in the non-manufacturing sector, and changes in labor costs. All these indicators are unlikely to have a significant impact on market direction but will provide some insight into how to proceed. Poor statistics are a reason to sell the dollar and buy the pound. As for the intraday strategy, I plan to act based on the realization of scenarios #1 and #2.
Buy Signal
Scenario #1: I plan to buy the pound today when the entry point reaches around 1.2528 (green line on the chart) with the aim of rising to the level of 1.2560 (thicker green line on the chart). At 1.2560, I will exit the purchases and open sales in the opposite direction (anticipating a movement of 30-35 points in the opposite direction from the level). Today, the pound's rise can be expected only after weak US statistics and a breakout of the daily high. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just beginning its rise from it.
Scenario #2: I also plan to buy the pound today in the event of two consecutive tests of the price at 1.2506 at a time when the MACD indicator is in oversold territory. This will limit the downward potential of the pair and lead to a reversal of the market upwards. Expect growth to opposite levels of 1.2528 and 1.2560.
Sell Signal
Scenario #1: I plan to sell the pound today after the level of 1.2506 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 level of 1.2479, where I will exit the sales and immediately open purchases in the opposite direction (anticipating a movement of 20-25 points in the opposite direction from the level). Sellers will show themselves in the event of inactivity near the daily high and strong US data. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just beginning to decline from it.
Scenario #2: I also plan to sell the pound today in the event of two consecutive tests of the price at 1.2528 at a time when the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a reversal of the market downwards. Expect a decline to opposite levels of 1.2506 and 1.2479.
On the Chart:
Thin green line - entry price, at which the trading instrument can be bought.
Thick green line - expected price, where you can set Take Profit or fix profits on your own, as further growth above this level is unlikely.
Thin red line - entry price at which the trading instrument can be sold.
Thick red line - expected price, where you can set Take Profit or fix profits on your own, as further decline below this level is unlikely.
MACD indicator. When entering the market, it is important to follow the overbought and oversold zones.
Important. Novice traders in the forex market need to be very careful when making decisions to enter the market. Before important fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You need to set stop orders to avoid losing your entire deposit, especially if you do not use money management and trade in large volumes.
And remember, for successful trading, it is necessary to have a clear trading plan, like the one presented above. Spontaneous decision-making based on the current market situation is inherently a losing strategy for an intraday trader.