GBP/USD: Tips for Beginner Traders on December 30th (U.S. Session)

[Ben Graham]

Trade Analysis and Trading Tips for the British Pound

The test of the 1.3506 price level occurred when the MACD indicator had already moved significantly downward from the zero line, which limited the pair's downward potential.

Against the backdrop of a lack of any UK economic data, the British pound managed to hold its ground against the US dollar. A market accustomed to a steady flow of economic reports suddenly faced an information vacuum. However, this silence carries a certain risk: the absence of news can trigger speculative moves based on rumors and sentiment rather than facts.

In the second half of the day, traders will closely monitor housing price dynamics to assess the impact of current Fed policy on the real estate market. A slowdown in price growth may indicate the effectiveness of measures aimed at curbing inflation, but it could also point to a weakening economy. The Chicago PMI, which reflects business activity in the region, will provide insight into the state of the manufacturing sector. A reading above 50 will signal expansion, while a value below will indicate contraction. However, the greatest interest will undoubtedly be the release of the FOMC meeting minutes. Market participants hope to gain more detailed insight into the discussions held among Federal Open Market Committee members regarding the future path of interest rates and inflation prospects. Particular attention will be paid to signals about the Fed's readiness for further monetary policy easing.

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

Buy Signal

Scenario No. 1: Today, I plan to buy the pound if the entry point is reached near 1.3522 (green line on the chart), with a growth target toward the 1.3555 level (the thicker green line on the chart). Around 1.3555, I will exit long positions and open short positions in the opposite direction (expecting a move of 30–35 points in the opposite direction from that level). Pound appreciation today can only be expected if US data turn out to be very weak.Important! Before buying, make sure the MACD indicator is above the zero line and is just starting to rise from it.

Scenario No. 2: I also plan to buy the pound today in the event of two consecutive tests of the 1.3506 price level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 1.3522 and 1.3555 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound today after a break below (update of) the 1.3506 level (red line on the chart), which would lead to a quick decline in the pair. The key target for sellers will be the 1.3472 level, where I will exit short positions and also open long positions in the opposite direction (expecting a move of 20–25 points in the opposite direction from that level). Pressure on the pound may return today only within the framework of a corrective move.Important! Before selling, make sure the MACD indicator is below the zero line and is just starting to fall from it.

Scenario No. 2: I also plan to sell the pound today in the event of two consecutive tests of the 1.3522 price level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.3506 and 1.3472 can be expected.

What's on the Chart

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – projected price where Take Profit orders can be placed or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – projected price where Take Profit orders can be placed or profits can be taken 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 be extremely cautious when making market entry decisions. Ahead of major fundamental reports, it is best to stay out of the market to avoid sharp price swings. 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, successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based solely 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