Analysis of Trades and Tips for Trading the British Pound
Due to the extremely low volatility of the pound and the lack of a significant reaction to retail sales data, which were not as bad as expected, I didn't make any trades in the first half of the day. The levels I identified were not tested, so there were no clear entry points. During the U.S. session, some data will be released, but it looks rather lackluster, especially compared to what was released earlier this week. The session will start with building permits issued, housing starts, and end with the University of Michigan Consumer Sentiment Index and inflation expectations. Don't forget the interview with FOMC member Austan D. Goolsbee, whose dovish statements could weaken the dollar at the end of the week. As for the intraday strategy, I plan to operate based on the implementation of scenario No. 2.
Buy Signal
Scenario No. 1: Today, I plan to buy the pound upon reaching the entry point around 1.2896 (green line on the chart) with the target of rising to the 1.2930 level (thicker green line on the chart). At the 1.2930 point, 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). The pound is likely to continue its upward trend today, but only if U.S. statistics are weak. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise from it.
Scenario No. 2: I also plan to buy the pound today in case of two consecutive tests of the 1.2869 price when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to a market reversal upward. Growth to the opposite levels of 1.2896 and 1.2930 can be expected.
Sell Signal
Scenario No. 1: I plan to sell the pound today after the level of 1.2869 (red line on the chart) is updated, which will lead to a quick decline in the pair. The key target for sellers will be the 1.2832 level, where I will exit the sales and immediately open purchases in the opposite direction (targeting a move of 20-25 points in the opposite direction from the level). Sellers will make their presence felt if there is no active movement around the new weekly high and strong U.S. data. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning to decline from it.
Scenario No. 2: I also plan to sell the pound today in case of two consecutive tests of the 1.2896 price when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline to the opposite levels of 1.2869 and 1.2832 can be expected.
Chart Overview:
Thin green line – the entry price at which the trading instrument can be bought.Thick green line – the assumed price where you can place Take Profit or manually fix profits, as further growth above this level is unlikely.Thin red line – the entry price at which the trading instrument can be sold.Thick red line – the assumed price where you can place Take Profit or manually fix profits, as further decline below this level is unlikely.MACD Indicator – When entering the market, it's important to consider the zones of overbought and oversold conditions.
Important: Beginner traders in the Forex market need to be very cautious when making decisions to enter the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.
And remember that successful trading requires a clear trading plan, similar to the one I presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.