FX.co ★ GBP/USD: Simple trading tips for novice traders for May 9th (US session)

Trade analysis and tips for trading the British pound

The test of the price at 1.2467 occurred at a moment when the MACD indicator was beginning to move down from the zero mark, confirming the correct entry point into the pound sell-off. The downward movement occurred after the Bank of England's decision to keep interest rates unchanged, but the most interesting part lies ahead when Bank of England Governor Andrew Bailey speaks. After his speech, pressure on the pound may either increase or sharply decrease. Everything will depend on the interpretation of his words. Additionally, data on initial jobless claims and weekly numbers of repeat claims for unemployment benefits in the US are released. However, these indicators are unlikely to change the situation with the pound. As for the intraday strategy, I plan to act based on the implementation of scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound when the entry point reaches around 1.2492 (green line on the chart), with a target of rising to the level of 1.2552 (thicker green line on the chart). At 1.2552, I will exit the purchases and open sales in the opposite direction (aiming for a movement of 30-35 pips in the opposite direction from the level). Today, the pound's rise can only be expected after weak US statistics and tough comments from Bailey regarding inflation and future policy. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the price at 1.2467 when the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to a reversal of the market upward. Expect a rise to the opposite levels of 1.2492 and 1.2552.

Sell Signal

Scenario #1: Today, I plan to sell the pound after the level of 1.2467 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 1.2405, where I will exit the sales and also immediately open purchases in the opposite direction (aiming for a movement of 20-25 pips in the opposite direction from the level). Sellers will manifest themselves in case of inactivity around the daily high and a soft position of the Bank of England, indicating a possible rate cut as early as this summer. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario #2: Today, I also plan to sell the pound in case of two consecutive tests of the price at 1.2492 when the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a reversal of the market downward. Expect a decline to the opposite levels of 1.2467 and 1.2405.

What's on the chart:

Thin green line – entry price, at which you can buy the trading instrument.

Thick green line – the expected price where you can set Take Profit or manually take profits, as further growth beyond this level is unlikely.

Thin red line – entry price, at which you can sell the trading instrument.

Thick red line – the expected price where you can set Take Profit or manually take profits, as further decline below this level is unlikely.

MACD indicator. When entering the market, it is important to follow overbought and oversold zones.

Important. Beginner traders in the forex market need to be very cautious 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 exchange rate 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 don't use money management and trade with large volumes.

And remember, successful trading requires a clear trading plan similar to the one I presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.