09.09.202618:11 Forex Analysis & Reviews: GBP/USD: Trading Tips for Beginner Traders – September 9 (US Session)

Review of Trades and Trading Tips for the British Pound

The test of the 1.3551 price level occurred when the MACD indicator was just beginning to move down from the zero line, confirming that the entry point for selling the pound was correct and resulting in a decline in the pair toward the target level of 1.3533.

The British pound once again had no domestic drivers of its own, which prevented it from rising significantly against the dollar. However, the dollar's prolonged weakness then came to the forefront. In recent days, the US currency has come under noticeable pressure due to currency interventions jointly conducted by the United States and the Bank of Japan, and this pressure is being felt across the board, not only against the yen. In this situation, all the pound had to do was avoid undermining its own position. With no domestic catalysts, it predictably became dependent on the external backdrop and benefited from the weakness of the other currency.

In my view, as long as the interventions continue to undermine the dollar, GBP/USD buyers have a favorable backdrop and may well maintain the initiative even without support from UK economic data. Nevertheless, I recognize that a rise driven solely by the weakness of the other side, rather than by the pound's own drivers, remains vulnerable. If the dollar gets some breathing room or a strong inflation report from the US is released, the picture could quickly reverse, so I would not rush to chase the pound higher for now.

In the second half of today's session, the pound's direction will be determined by a light US economic calendar, with the only significant release being ADP's weekly employment report. The indicator provides a fresh look at the labor market, but judging by recent releases of this kind, the dollar is currently reacting weakly to such data. Under these conditions, the pound remains dependent on the external backdrop, but I assess the risk of pressure from the dollar as moderate.

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 reaches around 1.3565 (the thin green line on the chart), with a target of 1.3592 (the thicker green line on the chart). Around 1.3592, I will exit 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 can be expected to rise today only after weak US 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 1.3551 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger a reversal higher. A rise toward the opposite levels of 1.3565 and 1.3592 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell the pound after the 1.3551 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 1.3525, where I will exit 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 pressure on the pound will return if the US data are strong. 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 1.3565 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and trigger a reversal lower. A decline toward the opposite levels of 1.3551 and 1.3525 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 where Take Profit can be placed 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 where Take Profit can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold zones into account.

Important. Beginner Forex traders should be extremely cautious when making market-entry decisions. Before important fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp exchange-rate fluctuations. If you decide to trade during news releases, always use stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade with 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 an inherently losing strategy for an intraday trader.