FX.co ★ GBP/USD: trading tips for beginners for European session on May 29

Overview of trading and tips on GBP/USD

The price test of 1.2736 occurred at a time when the MACD indicator had sharply risen above the zero mark, which limited the GBP/USD pair's potential to rise. For this reason, I decided not to buy the pound, and it was the right thing to do. Shortly after, another test of 1.2790, with the MACD indicator in the overbought area, gave an opportunity to implement scenario No. 2 for selling. As a result, the pair was down by almost 30 pips. Today, in the absence of UK data, it is much more difficult to continue the upward trend and test the monthly high. For this reason, it is better to be cautious, taking advantage of the pair's dips and focusing on scenario No. 2, which I will rely on in my intraday strategy.

Buy signals

Scenario No. 1. I plan to buy the pound today when GBP/USD reaches the entry point at 1.2774 plotted by the green line on the chart, aiming for growth to 1.2833 plotted by the thicker green line on the chart. In the area of 1.2833, 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 if the pair firmly breaks through the daily high. 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 1.2742 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 1.2774 and 1.2833.

Sell signals

Scenario No. 1. I plan to sell the pound today after testing the level of 1.2742 (the red line on the chart), which will lead to a rapid decline in GBP/USD. The key target for sellers will be 1.2696, where I am going to close short positions and also open long positions in the opposite direction (expecting a movement of 20-25 pips in the upward direction from that level). You can sell the pound after the pair fails to consolidate near the daily high. 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 1.2774 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 1.2742 and 1.2696.

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.