FX.co ★ GBP/USD: Simple Trading Tips for Beginners for the European Session on August 23

Analysis of trades and tips on GBP/USD

The price test of 1.3098 occurred when the MACD indicator had already moved significantly downward from the zero mark, which limited the bearish potential of the pair. For this reason, I did not sell the pound. After an extended period, another test of 1.3098 occurred when the MACD started moving downward from the zero mark, which confirmed the entry point for a short position. As a result, the pair fell by 25 pips, after which the pressure eased. Weak data from the US led to a less active decline of the pound during the US session, which constrained trading to a horizontal channel. Today, there are no economic reports from the UK, so the focus will be on the speech by Bank of England Governor Bailey, which is scheduled for the afternoon. For this reason, it is better to look for entry points to buy the pound in line with the trend rather than against it. For the intraday strategy, I will rely more on scenarios No. 1 and 2.

Buy signals

Scenario No 1. Today, I plan to buy the pound when it reaches the entry point around 1.3129, plotted by the green line on the chart, with the goal of rising to the level of 1.3184, plotted by the thicker green line on the chart. Around 1.3184, I plan to exit long positions and open short positions in the opposite direction, counting on a movement of 30-35 pips from the level. One can count on the pound's strong rise today in continuation of the trend. Important: Before buying, ensure the MACD indicator is above the zero mark and starting to rise from it.

Scenario No 2. I also plan to buy the pound today in case of two consecutive price tests of 1.3098 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse market upturn. One can expect growth to the opposite levels of 1.3129 and 1.3184

Sell signals

Scenario No 1. Today, I plan to sell the pound after testing the level of 1.3098, plotted by the red line on the chart, which will lead to a rapid decline in GBP/USD. The key target for sellers will be the level of 1.3042, where I will exit short positions and immediately open long positions in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from that level). It is possible to sell the pound if buyers fail in the area of the intraday high. Important: 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 price tests of 1.3129 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. One can expect a decline to the opposite levels of 1.3098 and 1.3042.

What's on the chart:

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

Thick green line: the estimated price at which you can set Take Profit or manually close positions, as further growth above this level is unlikely.

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

Thick red line: an estimated price at which you can place Take Profit or manually close positions, as further decline below this level is unlikely.

MACD indicator: when entering the market, it is essential to be guided by overbought and oversold zones.

Important: Novice traders in the forex market must be cautious when deciding 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. You must set stop orders to avoid losing your entire deposit, especially if you don't use money management and trade in large volumes.

Remember, a clear trading plan, like the one I've outlined, is essential for successful trading. Making impulsive decisions based on the current market situation is a losing strategy for novice intraday traders.