GBP/USD: Simple trading tips for novice traders on May 23rd (US session)
May 23, 2024 6:24 pm
Analysis of transactions and tips on trading the British pound
The price test of 1.2735 came when the MACD indicator was starting to rise from zero, which confirmed the signal to buy the pound, but it did not come to an upward movement. The data on the UK PMI indices disappointed, as despite the recovery in activity in the manufacturing sector, the growth of the service sector declined significantly. In the afternoon, the pound will be helped only by weak figures on the index of business activity in the manufacturing sector, the index of business activity in the services sector, and the composite US PMI index. The number of initial applications for unemployment benefits will be quite an interesting indicator, which may lead to a surge in volatility and data on housing sales volume in the primary market. Only weak figures will allow GBP/USD buyers to continue the uptrend. As for the intraday strategy, I plan to act based on implementing scenarios No. 1 and No. 2.
Buy signal
Scenario No. 1: I plan to buy the pound today when I reach the entry point in the area of 1.2740 (green line on the chart) to grow to 1.2775 (thicker green line). In the area of 1.2775, I will exit purchases and open sales in the opposite direction (counting on a movement of 30-35 points in the opposite direction from the level). Today’s growth of the pound can be counted on only after very weak data on the United States in the continuation of the upward trend. Important! Before buying, ensure the MACD indicator is above the zero mark and is just starting to grow from it.
Scenario No. 2: I also plan to buy the pound today in the case of two consecutive price tests of 1.2715, at a time when the MACD indicator will be in the oversold area. This will limit the pair’s downward potential and lead to an upward market reversal. We can expect an increase to the opposite levels of 1.2740 and 1.2775.
A sell signal
Scenario No. 1: I plan to sell the pound today after updating the level of 1.2715 (the red line on the chart), leading to a rapid decline in the pair. The key target of sellers will be the 1.2682 level, where I will exit sales and immediately open purchases in the opposite direction (counting on a movement of 20-25 points in the opposite direction from the level). Sellers will prove themselves in case of good data for the USA. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting to fall from it.
Scenario #2: I also plan to sell the pound today in the event of two consecutive price tests at 1.2740 when the MACD indicator is in the overbought area. This will limit the pair’s upward potential and lead to a downward market reversal. We can expect a decline to the opposite levels of 1.2715 and 1.2682.
Chart Key:
Thin green line – the entry price at which the trading instrument can be bought;
Thick green line – the anticipated price where 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 anticipated price where Take Profit can be set, or profits can be taken manually, as further decline below this level is unlikely;
MACD Indicator – using overbought and oversold zones when entering the market is important.
Important Notes for Beginner Forex Traders:
Be very cautious when making market entry decisions. To avoid sudden price fluctuations, it’s best to stay out of the market before the release of important fundamental reports. If you decide to trade during news releases, always place stop orders to minimize losses. You can quickly lose your entire deposit without stop orders, especially if you don’t use money management and trade large volumes.
Successful trading requires a clear plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are a losing strategy for intraday traders.
The material has been provided by InstaForex Company – www.instaforex.com
Analysis of transactions and tips on trading the British pound
The price test of 1.2735 came when the MACD indicator was starting to rise from zero, which confirmed the signal to buy the pound, but it did not come to an upward movement. The data on the UK PMI indices disappointed, as despite the recovery in activity in the manufacturing sector, the growth of the service sector declined significantly. In the afternoon, the pound will be helped only by weak figures on the index of business activity in the manufacturing sector, the index of business activity in the services sector, and the composite US PMI index. The number of initial applications for unemployment benefits will be quite an interesting indicator, which may lead to a surge in volatility and data on housing sales volume in the primary market. Only weak figures will allow GBP/USD buyers to continue the uptrend. As for the intraday strategy, I plan to act based on implementing scenarios No. 1 and No. 2.
Buy signal
Scenario No. 1: I plan to buy the pound today when I reach the entry point in the area of 1.2740 (green line on the chart) to grow to 1.2775 (thicker green line). In the area of 1.2775, I will exit purchases and open sales in the opposite direction (counting on a movement of 30-35 points in the opposite direction from the level). Today’s growth of the pound can be counted on only after very weak data on the United States in the continuation of the upward trend. Important! Before buying, ensure the MACD indicator is above the zero mark and is just starting to grow from it.
Scenario No. 2: I also plan to buy the pound today in the case of two consecutive price tests of 1.2715, at a time when the MACD indicator will be in the oversold area. This will limit the pair’s downward potential and lead to an upward market reversal. We can expect an increase to the opposite levels of 1.2740 and 1.2775.
A sell signal
Scenario No. 1: I plan to sell the pound today after updating the level of 1.2715 (the red line on the chart), leading to a rapid decline in the pair. The key target of sellers will be the 1.2682 level, where I will exit sales and immediately open purchases in the opposite direction (counting on a movement of 20-25 points in the opposite direction from the level). Sellers will prove themselves in case of good data for the USA. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting to fall from it.
Scenario #2: I also plan to sell the pound today in the event of two consecutive price tests at 1.2740 when the MACD indicator is in the overbought area. This will limit the pair’s upward potential and lead to a downward market reversal. We can expect a decline to the opposite levels of 1.2715 and 1.2682.
Chart Key:
Thin green line – the entry price at which the trading instrument can be bought;
Thick green line – the anticipated price where 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 anticipated price where Take Profit can be set, or profits can be taken manually, as further decline below this level is unlikely;
MACD Indicator – using overbought and oversold zones when entering the market is important.
Important Notes for Beginner Forex Traders:
Be very cautious when making market entry decisions. To avoid sudden price fluctuations, it’s best to stay out of the market before the release of important fundamental reports. If you decide to trade during news releases, always place stop orders to minimize losses. You can quickly lose your entire deposit without stop orders, especially if you don’t use money management and trade large volumes.
Successful trading requires a clear plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are a losing strategy for intraday traders.
The material has been provided by InstaForex Company – www.instaforex.com
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