GBP/USD: Tips for Beginner Traders on October 27th (U.S. Session)

[Ben Graham]

Analysis of Trades and Trading Advice on the British Pound

The test of the 1.3311 price level occurred when the MACD indicator had already moved far below the zero mark, which limited the pair's downward potential. For this reason, I did not sell the pound. The second test of 1.3311 coincided with the MACD being in the oversold area, which allowed Scenario #2 (buying the pound) to play out, resulting in a 30-point rise.

Today we are expecting the release of the U.S. Leading Indicators Index. Only a sharp decline in this figure would serve as a warning signal that could trigger new pound purchases. However, it's worth remembering that the pound today is not an impregnable fortress, but merely a temporary safe haven. Its strength lies in the weakness of the dollar, not in its own merits. The chances that the Bank of England will return to cutting interest rates sooner are now much higher than they were last week, so the upward potential of GBP/USD is clearly limited.

As for the intraday strategy, I will rely mainly on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today when the entry point around 1.3355 (green line on the chart) is reached, with the target of rising to 1.3390 (thicker green line on the chart). Around 1.3390, I will exit long positions and open short ones in the opposite direction (expecting a 30–35 point pullback from this level). A strong rise in the pound today is possible only if U.S. data turns out to be very weak.Important! Before buying, make sure the MACD indicator is above the zero mark and just starting to rise from it.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.3328 price level, at a time when the MACD is in the oversold area. This will limit the pair's downward potential and trigger a reversal upward. A rise toward the opposite levels of 1.3355 and 1.3390 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after a break below 1.3328 (red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be 1.3293, where I will exit short positions and immediately open long ones in the opposite direction (expecting a 20–25 point rebound from this level). The pound may fall further in the second half of the day.Important! Before selling, make sure the MACD indicator is below the zero mark and just beginning to fall from it.

Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.3355 price level, when the MACD is in the overbought area. This will limit the pair's upward potential and lead to a downward reversal of the market. A decline can be expected toward the opposite levels of 1.3328 and 1.3293.

Chart Legend

• Thin green line – entry price where the instrument can be bought
• Thick green line – projected price for setting a Take Profit or manually locking in profit, as further growth above this level is unlikely
• Thin red line – entry price where the instrument can be sold
• Thick red line – projected price for setting a Take Profit or manually locking in profit, as further decline below this level is unlikely
• MACD indicator – when entering the market, it is important to take into account overbought and oversold zones

Important Notice

Beginner Forex traders should be extremely cautious when making market entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid sudden price fluctuations. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you can very quickly lose your entire deposit, especially if you ignore money management and trade with large positions.

And remember: successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on current market conditions are, from the start, a losing strategy for an intraday trader.

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