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Trade Review and Trading Tips for the British Pound
The first test of the 1.3451 level occurred when the MACD indicator had already moved well below the zero line, which limited the pair's downward potential. The second test of 1.3451 allowed Buy Scenario No. 2 to play out, resulting in a 15-point gain.
The direction of the pound during the remainder of the session will be determined by the release of the U.S. ISM Manufacturing PMI for July, as there are no major domestic catalysts for the British currency today. The index reflects the health of the U.S. manufacturing sector based on surveys of purchasing managers, and any deviation from forecasts typically reshapes expectations for Federal Reserve interest rate policy and influences the strength of the U.S. dollar. Since this is a revised reading, the market's attention will focus on the direction of the revision. Under these conditions, the pound will largely be driven by external factors. If the data are revised upward and exceed economists' expectations, pressure on GBP/USD is likely to increase as the U.S. dollar strengthens. Conversely, weaker-than-expected data would weigh on the dollar and support the pound. Until the figures are released, sterling is likely to take its cue from overall risk sentiment, but ultimately the outcome will depend on the U.S. dollar.
As for my intraday strategy, I will primarily rely on the implementation of Scenario No. 1 and Scenario No. 2.
Scenario No. 1: I plan to buy the pound if the price reaches the entry point around 1.3476 (the green line on the chart), targeting a move to 1.3514 (the thicker green line on the chart). Around 1.3514, I plan to close long positions and open short positions, anticipating a 30–35 point pullback. The pound is likely to rise today only if the U.S. data come in weaker than expected.
Important: Before buying, make sure the MACD indicator is above the zero line and is just beginning to move higher.
Scenario No. 2: I also plan to buy the pound if the 1.3453 level is tested twice in succession while the MACD indicator is in oversold territory. This would limit the pair's downward potential and trigger an upward market reversal. In this case, a rise toward 1.3476 and 1.3514 can be expected.
Scenario No. 1: I plan to sell the pound after the 1.3453 level is breached (the red line on the chart), which is expected to trigger a rapid decline in the pair. The key downward target for sellers will be 1.3416, where I intend to close short positions and immediately open long positions, anticipating a 20–25 point rebound. Selling pressure on the pound is likely to return if the U.S. data are strong.
Important: Before selling, make sure the MACD indicator is below the zero line and is just beginning to move lower.
Scenario No. 2: I also plan to sell the pound if the 1.3476 level is tested twice in succession while the MACD indicator is in overbought territory. This would limit the pair's upward potential and trigger a downward market reversal. In this case, a decline toward 1.3453 and 1.3416 can be expected.
Important: Beginner Forex traders should make market entry decisions with great caution. It is generally best to stay out of the market ahead of major fundamental economic releases to avoid sharp price fluctuations. If you decide to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly result in the loss of your entire deposit, especially if you trade large position sizes without proper risk management.
Remember that successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based solely on current market conditions is an inherently losing strategy for an intraday trader.
*Analiza tržišta koja se ovde nalazi namenjena je boljem razumevanju tržišta i ne pruža instrukcije za vršenje trgovanja.
Uz InstaSpot-ove analitičke preglede uvek ćete biti u toku sa tržišnim trendovima! Klijentima InstaSpot-a su dostupni mnogobrojni besplatni servisi za uspešno trgovanje.
