FX.co ★ GBP/USD: trading tips for beginners for European session on April 17

Overview of yesterday's trading and tips on GBP/USD

The first price test of 1.2455 in the afternoon occurred at a time when the MACD indicator sharply moved up from the zero mark, which limited the pair's bullish potential. The second test of this price came at a time when the MACD was already in overbought territory, and traders could use the 2nd scenario to sell the pound within the downtrend. As a result, the pair fell by more than 30 pips. The weak UK unemployment report affected the bulls' mood, and only the mixed data on the US real estate market helped traders with the bullish correction. Today, the pound rose after the UK inflation data. The news that prices are not slowing down as much as economists expected fueled buying, as it may affect the Bank of England's plans to start cutting interest rates this summer. From a technical perspective, a correction is necessary, but don't forget that the pair is still following a downtrend. As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and No. 2.

Buy signal

Scenario No. 1. I plan to buy the pound today when GBP/USD reaches the entry point around 1.2448 plotted by the green line on the chart, aiming for growth to 1.2499 plotted by the thicker green line on the chart. In the area of 1.2499, I'm going to close long positions and open short ones in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). You can count on the pound's growth today within the framework of a bullish correction. Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario No. 2. I also plan to buy the pound today in case of two consecutive tests of the price of 1.2415 at the time when the MACD indicator is in the oversold area. This will limit the downward potential of the instrument and lead to an upward reversal of the market. We can expect growth to the opposite levels of 1.2448 and 1.2499.

Sell signal

Scenario No. 1. I plan to sell the pound today after the level of 1.2415 has been tested (the red line on the chart), which will lead to a rapid decline in GBP/USD. The key target for sellers will be 1.2369, where I am going to close sell positions and also immediately open buy positions in the opposite direction (expecting a movement of 20-25 pips in the upward direction from that level). You can sell the pound while the downward trend continues, especially after an unsuccessful attempt to grow in the first half of the day. 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 tests of 1.2448 at the time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward reversal of the market. We can expect a decline to the opposite level of 1.2415 and 1.2369.

What's on the chart:

The thin green line is the entry price at which you can buy the trading instrument.

The thick green line is the price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.

The thin red line is the entry price at which you can sell the trading instrument.

The thick red line is the price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.

MACD line: it is important to be guided by overbought and oversold areas when entering the market

Important: Novice traders in the cryptocurrency market need to be very cautious when making decisions 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. Without setting stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade with large volumes.

Remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I presented above. Spontaneously making trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.