FX.co ★ GBPUSD simple trading tips for beginners on February 7, 2023. Overview of yesterday's trades

GBP/USD overview of trades and trading tips

The pound is very likely to continue its decline. In the first half of the day, the UK will publish the Halifax house price index which is of little interest to traders. In addition, Sir David Ramsden, Deputy Governor for Markets, Banking and Resolution of the Bank of England, will give a speech today. If his rhetoric is dovish, the pound will come under more pressure and may face a huge sell-off. In the second half of the day, the US will publish the data on trade balance and consumer credit which may also change the market sentiment in favor of the US dollar. The statement by Fed Chair Jerome Powell may influence the market if he comments on Friday's jobs data. This may be another supportive factor for the greenback.

Buy signals

Scenario №1: it is possible to buy the pound today when the price hits the entry point of 1.2067 (a green line on the chart) with the upward target at 1.2108 (a thicker green line on the chart). I recommend closing buy positions at the level of 1.2108 and going short in the opposite direction, considering a retracement of 30-35 pips from this level. The pound may develop growth only if the BoE officials display an aggressive approach to the monetary policy. Note! Before going long, make sure that the MACD indicator is located above the zero mark or has just started to rise from it.

Scenario №2: you can also buy the pound when the price reaches the level of 1.2033 but make sure that the MACD is holding in the oversold area. This will limit the downside potential of the pair and will initiate an upside reversal. In this case, the quote may rise to the levels of 1.2067 and 1.2108.

Sell signals

Scenario №1: selling the pound is possible today after a retest of the 1.2033 level (a red line on the chart) which may lead to a rapid decline in the pair. The key downward target for sellers will become the level of 1.1996 where I recommend closing sell positions and going long in the opposite direction, considering a retracement of 20-25 pips from this level. The pound will come under pressure if bulls are idle at the weekly lows. Note! Before going short, make sure that the MACD indicator is located below the zero level or has just started to decline from it.

Scenario №2: you can also sell the pound when the price hits the 1.2067 level but make sure that the MACD has entered the overbought area. This will limit the upside potential of the price and lead to a downward reversal. In this case, the quote may move lower to the levels of 1.2033 and 1.1996.

On the chart:

The thin green line indicates the entry point for buying the instrument;

The thick green line indicates the estimated level for setting a Take Profit or closing trades manually as the pair is unlikely to move above this line;

The thin red line indicates the entry point for selling the instrument;

The thick red line indicates the estimated level for setting a Take Profit or closing trades manually as the pair is unlikely to move below this line;

When entering the market, it is essential to consider whether the MACD is located in the oversold or overbought area.

Important! Beginners on Forex should be very careful when making a decision to enter the market. It is recommended to stay out of the market ahead of important news releases to avoid sharp fluctuations of the price. If you decide to trade on the news, make sure you set stop-loss orders to minimize losses. Without setting a Stop Loss, you risk losing your entire deposit in no time, especially if you do not use money management and trade with large volumes.

Remember that you need to have a well-developed trading plan similar to the one above to be successful in trading. Spontaneous decision-making based on the current market situation is a losing strategy for an intraday trader.