Analysis of Trades and Trading Tips for the British Pound

The first test of the 1.2937 price level occurred when the MACD indicator had already risen significantly above the zero mark, limiting the pair's upward potential. For this reason, I did not buy the pound. The second test of 1.2937 happened shortly afterward and coincided with the MACD being in the overbought zone, allowing for Scenario #2 to materialize, which resulted in a 20-pip drop in the pound.

The pound is consistently being sold off during strong rallies toward the monthly high, indicating the potential for a deeper downward correction. This correction is necessary for the trading instrument to continue developing a bullish market. If sellers manage to consolidate below the 1.2850 level, it could trigger a more significant correction. In this scenario, the uptrend would come into question, leading to a consolidation within a wider range. Given the absence of important fundamental data today, this scenario appears to be the most likely. Investors will likely adopt a wait-and-see approach before making any significant moves on new GBP/USD purchases.

For intraday strategy, I will primarily rely on Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today upon reaching the entry point around 1.2897 (green line on the chart), targeting a rise to 1.2936 (thicker green line on the chart). Around 1.2936, I intend to exit purchases and open sell positions in the opposite direction, expecting a movement of 30-35 pips downward from this level. The pound's growth can be expected to continue the upward trend. Important! Before buying, make sure the MACD indicator is above the zero mark and just starting to rise.

Scenario #2: I also plan to buy the pound today if the price tests 1.2873 twice a row while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. Growth to the opposite levels of 1.2897 and 1.2936 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after the 1.2873 level is broken (red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 1.2834, where I intend to exit sell positions and immediately open buy positions in the opposite direction, expecting a movement of 20-25 pips upward from this level. Selling the pound is best done at the highest possible levels. Important! Before selling, make sure the MACD indicator is below the zero mark and starting to decline.

Scenario #2: I also plan to sell the pound today if the price tests 1.2897 twice a row while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. A decline to the opposite levels of 1.2873 and 1.2834 can be expected.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.