GBP/USD: Simple Trading Tips for Beginner Traders on February 24. Analysis of Yesterday's Forex Trades

[Ben Graham]

Analysis of Trades and Trading Tips for the British Pound

The test of the price at 1.3499 occurred when the MACD indicator had moved significantly below the zero mark, which, in my opinion, limited the pair's downward potential. For this reason, I did not sell the pound.

Starting today, a new 10% tariff from the U.S. applies to all countries. This move was a response to the U.S. Supreme Court's decision to annul past tariffs, which has led to a sharp rise in uncertainty and put pressure on the British pound against the dollar.

Next, we await the retail sales data from the Confederation of British Industry. This indicator, serving as a barometer of consumer activity, directly reflects the health of the British economy. Positive data could strengthen the pound's position, allowing the GBP/USD pair to recover somewhat from yesterday's decline. The focus will then shift to the Bank of England, where parliamentary hearings are expected regarding the central bank's latest reports on monetary policy. Any indications of a possible easing of monetary policy could significantly impact the value of the pound.

As for the intraday strategy, I will rely more on implementing scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy the pound today at an entry point around 1.3497 (green line on the chart), targeting a move to 1.3524 (thicker green line on the chart). At the level of 1.3524, I intend to exit the long positions and open shorts back in the opposite direction (aiming for a movement of 30-35 pips in the opposite direction from the level). Pound growth can only be expected after the central bank takes a firm stance. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the price at 1.3481 when the MACD indicator is in the oversold area. This will limit the downward potential of the pair and lead to a market reversal upwards. One can expect growth to opposing levels of 1.3497 and 1.3524.

Sell Scenarios

Scenario #1: I plan to sell the pound today after the 1.3481 level is updated (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the level of 1.3462, where I intend to exit shorts and immediately buy back in the opposite direction (aiming for a movement of 20-25 pips in the opposite direction from the level). Pound sellers will emerge if the committee shows a soft position. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario #2: I also plan to sell the pound today if the price tests 1.3497 twice in a row while the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a market reversal downwards. One can expect a decline to opposing levels at 1.3481 and 1.3462.

What the Chart Shows:

• Thin Green Line: Entry price for buying the trading instrument.
• Thick Green Line: Estimated price for setting Take Profit or locking in profits, as further growth above this level is unlikely.
• Thin Red Line: Entry price for selling the trading instrument.
• Thick Red Line: Estimated price for setting Take Profit or locking in profits, as further decline below this level is unlikely.
• MACD Indicator: When entering the market, focus on the overbought and oversold zones.

Important:

Beginner traders in the Forex market must make entry decisions very cautiously. It is best to stay out of the market before significant fundamental reports are released to avoid sudden price fluctuations. If you decide to trade during news releases, always set 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 large volumes.

Remember, to trade successfully, you must have a clear trading plan, as 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