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GBP/USD: Simple trading tips for novice traders on April 16th (US session)
April 16, 2024 4:24 pmVideo
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Trade Analysis and Advice on Trading the British Pound
We didn’t quite reach the price test at 1.2455 in the first half of the day, so there were no suitable entry points formed in the market. The pound was quickly bought back after the decline caused by weak UK labor market data. However, more was needed to continue the upward trend. Everything will now depend on the US reports. In the second half of the day, we await statistics on the volume of building permits issued and the number of new foundations laid. The real estate market is very important for the Fed, so weak indicators may work against the dollar, leading to a recovery of the pound during American trading. Strong data on industrial production growth is a reason for buying the dollar and selling the pound. As for the intraday strategy, I will rely more on scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the pound when the entry point reaches around 1.2455 (green line on the chart), with the target of rising to the level of 1.2499 (thicker green line on the chart). At around 1.2499, I will exit the purchases and open sales in the opposite direction (targeting a movement of 30–35 points in the opposite direction from the level). The rise of the pound today can be expected only after weak data on problems in the US real estate market. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario #2: I also plan to buy the pound today in the event of two consecutive tests of the price at 1.2428 when the MACD indicator is in oversold territory. This will limit the downside potential of the pair and lead to an upward reversal of the market. You can expect growth at the opposite levels of 1.2455 and 1.2499.
Sell Signal
Scenario #1: I plan to sell the pound today after the level of 1.2428 is updated (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the level of 1.2386, where I will exit the sales and immediately open purchases in the opposite direction (targeting a movement of 20–25 points in the opposite direction from the level). Sellers will show themselves only against the backdrop of strong data from the US. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario #2: I also plan to sell the pound today in the event of two consecutive tests of the price at 1.2455 when the MACD indicator is in overbought territory. This will limit the upside potential of the pair and lead to a downward reversal of the market. You can expect a decline to the opposite levels of 1.2428 and 1.2386.
What’s on the chart:
Thin green line – entry price for buying the trading instrument.
Thick green line – the expected price where you can set Take Profit or independently take profits, as further growth above this level is unlikely.
Thin red line – entry price for selling the trading instrument.
Thick red line – the expected price where you can set Take Profit or independently take profits, as further decline below this level is unlikely.
MACD indicator. When entering the market, it is important to rely on overbought and oversold zones.
Important. Beginner traders in the forex market need to be very cautious when making trading decisions. It is best to stay out of the market before important fundamental reports to avoid being caught in sharp exchange rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You need to place stop orders to lose your entire deposit quickly, especially if you do not use money management and trade in large volumes. And remember that successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.
The material has been provided by InstaForex Company – www.instaforex.com
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