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FX.co ★ GBP/USD: Simple Trading Tips for Beginner Traders on August 22 (U.S. Session)

GBP/USD: Simple Trading Tips for Beginner Traders on August 22 (U.S. Session)

Analysis of Trades and Tips for Trading the British Pound

The test of the 1.3100 price level occurred when the MACD indicator had already moved significantly above the zero mark, limiting the pair's upward potential. Given the pound's overbought condition, I decided to refrain from entering the market. The UK PMI data turned out to be quite good, helping the pair reach a new monthly high and maintaining its upward momentum. However, the second half of the day is also filled with statistics that could quickly put pressure back on GBP/USD. We expect data on the U.S. Manufacturing PMI, Services PMI, Composite PMI for August, and the weekly Initial Jobless Claims. Only significantly weak data would trigger another major dollar sell-off and strengthen the pound. As for the intraday strategy, I plan to act based on the implementation of Scenarios 1 and 2.

GBP/USD: Simple Trading Tips for Beginner Traders on August 22 (U.S. Session)

Buy Signal

Scenario 1: Today, I plan to buy the pound if the price reaches around 1.3129 (green line on the chart) with a target of 1.3184. At 1.3184, I will exit the long positions and enter short positions, targeting a 30-35 point movement in the opposite direction from the level. The pound's rise today is likely to continue the upward trend, but only if U.S. statistics are weak. It is important to ensure that the MACD indicator is above the zero mark and just starting its upward movement before buying.

Scenario 2: I also plan to buy the pound today in the case of two consecutive tests of the 1.3098 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. The expected rise would target the resistance levels at 1.3129 and 1.3184.

Sell Signal

Scenario 1: I plan to sell the pound today after the price drops below 1.3098 (red line on the chart), leading to a quick decline in the pair. The key target for sellers will be the 1.3042 level, where I plan to close short positions and immediately buy the pound, targeting a 20-25 point movement in the opposite direction from the level. Sellers will assert themselves if there is no significant activity around the new weekly high and strong PMI statistics. It is important to ensure that the MACD indicator is below the zero mark and just starting its downward movement before selling.

Scenario 2: I also plan to sell the pound today in the case of two consecutive tests of the 1.3129 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. The expected decline would target the levels at 1.3098 and 1.3042.

GBP/USD: Simple Trading Tips for Beginner Traders on August 22 (U.S. Session)

Explanation of the chart elements:

  • Thin green line: Entry price at which you can buy the trading instrument.
  • Thick green line: Expected price where you can set Take Profit or manually lock in 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: Expected price where you can set Take Profit or manually lock in profits, as further decline below this level is unlikely.
  • MACD Indicator: It is important to consider overbought and oversold zones when entering the market.

Important: Beginner traders in the forex market need to make trading decisions very cautiously. Before the release of important fundamental reports, it's best to stay out of the market to avoid being caught in sharp price swings. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you're not practicing money management and trading large volumes.

And remember, for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation are initially a losing strategy for intraday traders.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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