The test of the 1.2905 price level coincided with the MACD indicator beginning its downward trend from the zero line. This confirmed a valid entry point for selling the pound. The pair moved downward toward the target level of 1.2870 but missed testing this level by just a few points.
The absence of new UK economic data did not limit the bearish momentum observed since the end of last week. In the second half of today's session, no US statistics are expected to alter the market direction. Therefore, anticipating further depreciation of the pound is reasonable. However, if sellers fail to demonstrate activity by mid-US trading, a correction may occur. For today's intraday strategy, I will focus on implementing Scenarios 1 and 2.
Scenario 1:I plan to buy the pound at 1.2905 (green line on the chart), targeting 1.2947 (thicker green line on the chart). Upon reaching 1.2947, I plan to exit the market and initiate short positions, aiming for a move of 30–35 points from the entry point. A substantial bullish movement in the pound is unlikely today.
Important: Before buying, ensure the MACD indicator is above the zero line and beginning an upward trend.
Scenario 2:Alternatively, I plan to buy the pound if the price undergoes two consecutive tests of 1.2875, with the MACD indicator in the oversold zone. This setup will likely limit the pair's downward potential and lead to an upward market reversal. Growth toward the resistance levels of 1.2905 and 1.2947 can be expected.
Sell SignalScenario 1:I plan to sell the pound after a breakout below 1.2875 (red line on the chart), which may lead to a rapid decline in the pair. The key target for sellers will be 1.2851, where I will exit the market and potentially initiate long positions, aiming for a move of 20–25 points in the opposite direction. Sellers are likely to take advantage of a weak correction.
Important: Before selling, ensure the MACD indicator is below the zero line and beginning a downward trend.
Scenario 2:Alternatively, I plan to sell the pound if the price undergoes two consecutive tests of 1.2905, with the MACD indicator in the overbought zone. This setup will likely limit the pair's upward potential and lead to a downward market reversal. A decline toward the support levels of 1.2875 and 1.2851 can be expected.
Chart Key
Thin Green Line: Entry price for initiating long positions.Thick Green Line: Suggested price for setting Take Profit or manually securing profit, as further growth beyond this level is unlikely.Thin Red Line: Entry price for initiating short positions.Thick Red Line: Suggested price for setting Take Profit or manually securing profit, as further declines beyond this level are unlikely.MACD Indicator: It is essential to consider overbought and oversold zones when making trading decisions.Important Notes for Beginner Forex TradersExercise caution when entering the market.Avoid trading during major economic announcements or reports to prevent sudden price swings.Always use stop-loss orders to minimize potential losses. Without stop-loss orders, you risk losing your entire deposit, particularly when trading large volumes without effective money management.Remember, successful trading requires a clear and structured plan, such as the one outlined above. Making impulsive trading decisions based on current market conditions often leads to losses, especially for intraday traders.