19.08.202613:00 Analisis Forex & Kajian: GBP/USD: Trading Tips for Beginner Traders – August 19 (U.S. Session)

Trade Review and Trading Tips for the British Pound

The 1.3545 price test occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential.

The acceleration in UK inflation gave the pound upward momentum in the first half of the day, although the structure of the report was not as straightforward as it initially appeared. Consumer prices increased by 2.9% in July versus 2.6% in June, and the market initially interpreted this as a reason to buy the British currency, as higher inflation strengthens the case for a tighter Bank of England policy. However, a closer look at the data quickly revealed that the increase was driven by the energy component, as energy prices rose by 13% and gas prices by almost 15% over the month.

Services inflation, which the Bank of England monitors particularly closely, fell to 3.4% from 3.6%, while core inflation remained at 2.6%. These components better reflect underlying price pressures, and their moderation indicates that there has been no broad-based acceleration in prices. For GBP/USD, this means that the support from higher headline inflation may prove unsustainable, as if the market focuses on the slowdown in services inflation, the pound will lack sufficient grounds to extend its advance without additional catalysts from the dollar.

In the second half of the day, the direction of the pound will be determined by the minutes of the latest Fed meeting, as the British currency has no significant domestic catalysts today. Interest in the document is particularly high because three policymakers called for a rate hike at that meeting, and the market wants to assess how realistic such a prospect is. The minutes reveal the course of the discussion within the committee and are used to assess the balance of power between policymakers favoring a tighter policy and those advocating a more cautious approach, which directly affects the strength of the dollar. Under these circumstances, the pound becomes dependent on external factors. If the minutes confirm the hawkish stance of some Fed officials, the dollar will strengthen, potentially pushing GBP/USD lower, while a dovish message will support the British currency.

As for the intraday strategy, I will focus more on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound when the entry point is reached around 1.3567 (the green line on the chart), with a target of 1.3587 (the thicker green line on the chart). Around 1.3587, I will close the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. The pound's rise can be expected to continue the trend today only after weak U.S. economic data. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario #2: Today, I also plan to buy the pound if the price tests 1.3550 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal higher. A rise toward the opposite levels of 1.3567 and 1.3587 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell the pound after the 1.3550 level is broken (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 1.3528, where I will close the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Strong downward pressure on the pound will return following strong U.S. economic data. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario #2: Today, I also plan to sell the pound if the price tests 1.3567 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal lower. A decline toward the opposite levels of 1.3550 and 1.3528 can be expected.

What the Chart Shows

• Thin green line — the entry price at which the trading instrument can be bought.
• Thick green line — the expected price level at which Take Profit can be set or profits can be taken manually, as further growth above this level is unlikely.
• Thin red line — the entry price at which the trading instrument can be sold.
• Thick red line — the expected price level at which Take Profit can be set or profits can be taken manually, as further decline below this level is unlikely.
• MACD indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important. Beginner Forex traders should be extremely cautious when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during the release of economic data, always place stop orders to minimize losses. Without stop orders, you can lose your entire account balance very quickly, especially if you do not use proper money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making trading decisions spontaneously based on the current market situation is fundamentally a losing strategy for an intraday trader.