GBP/USD: Tips for Beginner Traders on December 29th (U.S. Session)

[Ben Graham]

Trade Analysis and Trading Advice for the British Pound

The test of the 1.3483 price level occurred at a moment when the MACD indicator had already moved significantly downward from the zero line, which limited the downward potential of the pair—especially within an uptrend. The second test of 1.3483 took place when the MACD was in the oversold area, which led to the implementation of buy scenario No. 2 for the pound. As a result, the pair rose by 20 points.

Against the backdrop of the absence of any statistics from the UK, the British pound managed to hold its ground against the U.S. dollar, demonstrating resilience. The lack of fresh data usually deprives markets of reference points, forcing investors to rely on previously published indicators and overall market sentiment. In such conditions, technical analysis becomes especially important, as traders closely monitor support and resistance levels in an attempt to predict further currency movements.

In the afternoon, data on the volume of pending home sales in the U.S. housing market are expected to be released. Analysts closely monitor the number of homes under construction that have already found buyers but are not yet completed. This metric helps determine the scale of future supply and assess the balance between demand and supply. However, the impact of the report on financial markets is unlikely to be significant. Unjustifiably high figures may trigger a weakening of the dollar, while favorable data could boost optimism and support USD strengthening.

As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy the pound when the entry point around 1.3510 is reached (green line on the chart), targeting growth to the 1.3530 level (the thicker green line on the chart). Around 1.3530, I plan to exit long positions and open short positions in the opposite direction (expecting a move of 30–35 points from the level). Pound growth today can only be expected in the case of very poor U.S. data.

Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today in the case of two consecutive tests of the 1.3483 price level when the MACD indicator is in the oversold area. This will limit the downward potential of the pair and lead to a reversal of the market upward. Growth toward the opposite levels of 1.3510 and 1.3530 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound today after a break below the 1.3483 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be the 1.3456 level, where I plan to exit short positions and immediately open long positions in the opposite direction (expecting a move of 20–25 points in the opposite direction from the level). Pressure on the pound may return today only within the framework of a correction.

Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to fall from it.

Scenario No. 2: I also plan to sell the pound today in the case of two consecutive tests of the 1.3510 price level when the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a reversal of the market downward. A decline toward the opposite levels of 1.3483 and 1.3456 can be expected.

What's on the Chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price where Take Profit orders can be placed or profits can be manually locked in, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price where Take Profit orders can be placed or profits can be manually locked in, 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 cautiously. Before the release of major fundamental reports, 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 lose your entire deposit very quickly, especially if you do not use money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com