GBP/USD: Tips for Beginner Traders on February 20th (U.S. Session)

[Ben Graham]

Trade Review and Tips for Trading the British Pound

The test of the 1.3453 level occurred at a time when the MACD indicator was just beginning to move upward from the zero line, confirming a correct entry point for buying the pound. As a result, the pair rose by 20 points.

In the second half of the day, key data capable of significantly impacting financial markets are expected. The focus will be on U.S. GDP figures for the fourth quarter of 2025. Analysts forecast a slowdown in the growth rate of the American economy to 3.0%, compared to an impressive 4.4% in the third quarter. Such cooling may indicate stabilization or even the beginning of a correction phase following a period of active recovery.

Along with GDP data, figures for the Core Personal Consumption Expenditures (PCE) Index will be released, which is the Federal Reserve's preferred inflation indicator. Fresh data on Americans' income and spending levels will also be published. Analysis of these indicators will provide insight into consumer confidence and purchasing power, which directly affect retail sales dynamics and the overall economic climate.

Taken together, these data form a comprehensive picture of the state of the U.S. economy, and their interpretation will be of great importance to traders. Strong data mean a strong dollar.

As for the intraday strategy, I will rely more on implementing Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy the pound when the price reaches the entry point around 1.3480 (green line on the chart), with a target of 1.3510 (thicker green line on the chart). Around 1.3510, I will exit long positions and open short positions in the opposite direction (aiming for a 30–35 point move in the opposite direction from that level). A rise in the pound today can be expected after weak U.S. data.Important! Before buying, make sure that the MACD indicator is above the zero line and just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today in the event of two consecutive tests of the 1.3461 level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 1.3480 and 1.3510 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after a break below the 1.3461 level (red line on the chart), which would lead to a quick decline in the pair. The key target for sellers will be 1.3432, where I will exit short positions and immediately open long positions in the opposite direction (aiming for a 20–25 point move in the opposite direction from that level). Pressure on the pound will return today in the event of strong data.Important! Before selling, make sure that the MACD indicator is below the zero line and just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound today in the event of two consecutive tests of the 1.3480 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.3461 and 1.3432 can be expected.

What's on the Chart:

• Thin green line – entry price at which you can buy the trading instrument;
• Thick green line – estimated price where you can set Take Profit or lock in profits manually, as further growth above this level is unlikely;
• Thin red line – entry price at which you can sell the trading instrument;
• Thick red line – estimated price where you can set Take Profit or lock in profits manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important: Beginner Forex traders should make market entry decisions very carefully. Before major fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can very quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

And remember, successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based solely 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