GBP/USD: trading tips for beginners for European session on May 9
May 9, 2024 8:22 am
Overview of trading and tips on GBP/USD
The price test of 1.2500 occurred at a time when the MACD indicator had sharply risen above the zero mark, which limited the GBP/USD pair’s bullish potential. For this reason, I did not enter the market. Unfortunately, I never saw a second test of 1.2500, so I couldn’t sell the pound in the afternoon. Yesterday, the absence of UK data affected the pair’s volatility, but today everything could change in a moment. The Bank of England’s decision on the main interest rate will serve as a prelude to Governor Andrew Bailey’s speech. The pair’s direction depends on what the central bank is preparing for. In any case, I bet the pound will strengthen, as preparations for a summer rate cut will benefit the UK economy, which is currently experiencing challenging times. If Bailey doesn’t soften his tone, it will also help the pound cope with the recent pressure. As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and No. 2.
Buy signals
Scenario No. 1. I plan to buy the pound today when GBP/USD reaches the entry point at 1.2500 plotted by the green line on the chart, aiming for growth to 1.2552 plotted by the thicker green line on the chart. In the area of 1.2552, I’m going to close long positions and open short ones in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). You can count on the pound’s growth today, but only if the BoE signals an interest rate cut. Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario No. 2. I also plan to buy the pound today in case of two consecutive tests of the price of 1.2467 at the time when the MACD indicator is in the oversold area. This will limit the downward potential of the instrument and lead to an upward reversal of the market. We can expect growth to the opposite levels of 1.2500 and 1.2552.
Sell signals
Scenario No. 1. I plan to sell the pound today after testing the level of 1.2467 (the red line on the chart), which will lead to a rapid decline in GBP/USD. The key target for sellers will be 1.2430, where I am going to close short positions and also open long positions in the opposite direction (expecting a movement of 20-25 pips in the upward direction from that level). You can sell the pound after the pair fails to consolidate near the local high. Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario No. 2: I also plan to sell the pound today in case of two consecutive tests of 1.2500 at the time when the MACD indicator is in the overbought area. This will limit the pair’s upward potential and lead to a downward reversal of the market. We can expect a decline to the opposite level of 1.2467 and 1.2430.
What’s on the chart:
The thin green line is the entry price at which you can buy the trading instrument.
The thick green line is the price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
The thin red line is the entry price at which you can sell the trading instrument.
The thick red line is the price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line: it is important to be guided by overbought and oversold areas when entering the market
Important: Novice traders in the cryptocurrency market need to be very cautious when making decisions to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you don’t use money management and trade with large volumes.
Remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I presented above. Spontaneously making trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.
The material has been provided by InstaForex Company – www.instaforex.com
Overview of trading and tips on GBP/USD
The price test of 1.2500 occurred at a time when the MACD indicator had sharply risen above the zero mark, which limited the GBP/USD pair’s bullish potential. For this reason, I did not enter the market. Unfortunately, I never saw a second test of 1.2500, so I couldn’t sell the pound in the afternoon. Yesterday, the absence of UK data affected the pair’s volatility, but today everything could change in a moment. The Bank of England’s decision on the main interest rate will serve as a prelude to Governor Andrew Bailey’s speech. The pair’s direction depends on what the central bank is preparing for. In any case, I bet the pound will strengthen, as preparations for a summer rate cut will benefit the UK economy, which is currently experiencing challenging times. If Bailey doesn’t soften his tone, it will also help the pound cope with the recent pressure. As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and No. 2.
Buy signals
Scenario No. 1. I plan to buy the pound today when GBP/USD reaches the entry point at 1.2500 plotted by the green line on the chart, aiming for growth to 1.2552 plotted by the thicker green line on the chart. In the area of 1.2552, I’m going to close long positions and open short ones in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). You can count on the pound’s growth today, but only if the BoE signals an interest rate cut. Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario No. 2. I also plan to buy the pound today in case of two consecutive tests of the price of 1.2467 at the time when the MACD indicator is in the oversold area. This will limit the downward potential of the instrument and lead to an upward reversal of the market. We can expect growth to the opposite levels of 1.2500 and 1.2552.
Sell signals
Scenario No. 1. I plan to sell the pound today after testing the level of 1.2467 (the red line on the chart), which will lead to a rapid decline in GBP/USD. The key target for sellers will be 1.2430, where I am going to close short positions and also open long positions in the opposite direction (expecting a movement of 20-25 pips in the upward direction from that level). You can sell the pound after the pair fails to consolidate near the local high. Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario No. 2: I also plan to sell the pound today in case of two consecutive tests of 1.2500 at the time when the MACD indicator is in the overbought area. This will limit the pair’s upward potential and lead to a downward reversal of the market. We can expect a decline to the opposite level of 1.2467 and 1.2430.
What’s on the chart:
The thin green line is the entry price at which you can buy the trading instrument.
The thick green line is the price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
The thin red line is the entry price at which you can sell the trading instrument.
The thick red line is the price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line: it is important to be guided by overbought and oversold areas when entering the market
Important: Novice traders in the cryptocurrency market need to be very cautious when making decisions to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you don’t use money management and trade with large volumes.
Remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I presented above. Spontaneously making trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.
The material has been provided by InstaForex Company – www.instaforex.com
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