GBP/USD: Simple trading tips for novice traders on May 23rd. Analysis of yesterday’s forex transactions
May 23, 2024 5:22 pm
Analysis of transactions and tips on trading the British pound
The price test of 1.2727 came at a time when the MACD indicator was just starting to move up from zero, which was a confirmation of the scenario for buying the pound. As a result, the upward movement amounted to more than 20 points. Yesterday’s inflation data in the UK made a lot of noise, so it was difficult for traders to determine the further direction of the pair. Today, buyers can benefit from good reports on the UK Manufacturing Business Activity Index and the Services Business Activity Index. Services are especially important, as they account for a large part of the economy and an increase in activity will certainly help it. Bad data can lead to a strong sell-off of the pound, since no one canceled the high demand for the US dollar. As for the intraday strategy, I will rely more 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 1.2735 (green line on the chart) in order to grow to the level of 1.2775 (thicker green line on the chart). In the area of 1.2775, I’m going to exit purchases and open sales in the opposite direction (counting on a movement of 30-35 points in the opposite direction from the level). It will be possible to count on the growth of the pound today in the continuation of the bull market development only after very good PMI data. 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 reversal of the market. We can expect an increase to the opposite levels of 1.2735 and 1.2775.
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), which will lead to a rapid decline in the pair. The key target of sellers will be the 1.2682 level, where I’m going to exit sales, as well as immediately open purchases in the opposite direction (counting on a movement of 20–25 points in the opposite direction from the level). It is possible to sell the pound only after an unsuccessful consolidation in the area of the local maximum and weak PMI data. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning to decline.
Scenario No. 2: I also plan to sell the pound today in the case of two consecutive price tests of 1.2735 at a time when the MACD indicator will be in the overbought area. This will limit the upward potential of the pair and lead to a downward reversal of the market. We can expect a decline to the opposite levels of 1.2715 and 1.2682.
Chart Explanation:
Thin green line – entry price for buying the trading instrument.
Thick green line – the estimated price where you can set Take Profit or manually fix profits, as further growth above this level is unlikely.
Thin red line – entry price for selling the trading instrument.
Thick red line – the estimated price where you can set Take Profit or manually fix profits, as further decline below this level is unlikely.
MACD indicator: It is crucial to use overbought and oversold zones when entering the market.
Important: Beginner traders in the forex market should make market entry decisions very cautiously. It is best to stay out of the market before the release of important fundamental reports to avoid sharp fluctuations in exchange rates. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.
Remember, successful trading requires a clear trading plan, like the one I have presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.
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 1.2727 came at a time when the MACD indicator was just starting to move up from zero, which was a confirmation of the scenario for buying the pound. As a result, the upward movement amounted to more than 20 points. Yesterday’s inflation data in the UK made a lot of noise, so it was difficult for traders to determine the further direction of the pair. Today, buyers can benefit from good reports on the UK Manufacturing Business Activity Index and the Services Business Activity Index. Services are especially important, as they account for a large part of the economy and an increase in activity will certainly help it. Bad data can lead to a strong sell-off of the pound, since no one canceled the high demand for the US dollar. As for the intraday strategy, I will rely more 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 1.2735 (green line on the chart) in order to grow to the level of 1.2775 (thicker green line on the chart). In the area of 1.2775, I’m going to exit purchases and open sales in the opposite direction (counting on a movement of 30-35 points in the opposite direction from the level). It will be possible to count on the growth of the pound today in the continuation of the bull market development only after very good PMI data. 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 reversal of the market. We can expect an increase to the opposite levels of 1.2735 and 1.2775.
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), which will lead to a rapid decline in the pair. The key target of sellers will be the 1.2682 level, where I’m going to exit sales, as well as immediately open purchases in the opposite direction (counting on a movement of 20–25 points in the opposite direction from the level). It is possible to sell the pound only after an unsuccessful consolidation in the area of the local maximum and weak PMI data. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning to decline.
Scenario No. 2: I also plan to sell the pound today in the case of two consecutive price tests of 1.2735 at a time when the MACD indicator will be in the overbought area. This will limit the upward potential of the pair and lead to a downward reversal of the market. We can expect a decline to the opposite levels of 1.2715 and 1.2682.
Chart Explanation:
Thin green line – entry price for buying the trading instrument.
Thick green line – the estimated price where you can set Take Profit or manually fix profits, as further growth above this level is unlikely.
Thin red line – entry price for selling the trading instrument.
Thick red line – the estimated price where you can set Take Profit or manually fix profits, as further decline below this level is unlikely.
MACD indicator: It is crucial to use overbought and oversold zones when entering the market.
Important: Beginner traders in the forex market should make market entry decisions very cautiously. It is best to stay out of the market before the release of important fundamental reports to avoid sharp fluctuations in exchange rates. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.
Remember, successful trading requires a clear trading plan, like the one I have presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.
The material has been provided by InstaForex Company – www.instaforex.com
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