GBP/USD: Tips for Beginner Traders on February 19th (U.S. Session)

[Ben Graham]

Trade Review and Tips for Trading the British Pound

The test of the 1.3498 price level occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. A second test of this level led to the implementation of Sell Scenario No. 2 for the pound, resulting in a 10-point decline.

The absence of important UK statistics helped the pound post slight gains in the first half of the day, but pressure on the market later returned.

Ahead of us are important statistical releases that could significantly impact GBP/USD. Let's begin with the weekly U.S. initial jobless claims report. Although it is a weekly indicator, it serves as a sensitive barometer of labor market conditions. An increase may signal a deterioration in the economic situation, while a decline would point to continued resilience and positive trends. Analyzing this indicator in the context of broader macroeconomic data will provide a better understanding of the direction of the U.S. economy and help determine the future trajectory of interest rates.

The next key release will be the Philadelphia Fed Manufacturing Index. Although it is a regional index, it traditionally shows a strong correlation with broader national manufacturing indicators. Its dynamics reflect activity in the manufacturing sector of one of the country's leading industrial regions. Data on the trade balance will also be released. This indicator reflects the difference between exports and imports of goods and services. Changes in the trade balance following Trump's intervention with trade tariffs will have a direct impact on GDP and may signal the competitiveness of domestic producers in the global market. A reduction in the trade deficit could support the dollar.

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 it reaches the entry point around 1.3505 (green line on the chart), targeting growth to 1.3533 (thicker green line on the chart). Around 1.3533, I will exit long positions and open short positions in the opposite direction (aiming for a 30–35 point move from that level). The pound can be expected to rise today after weak U.S. data.Important! Before buying, make sure 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 case of two consecutive tests of the 1.3482 level when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 1.3505 and 1.3533 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after a break below the 1.3482 level (red line on the chart), which would lead to a quick decline in the pair. The key target for sellers will be 1.3452, where I will exit short positions and immediately open long positions in the opposite direction (aiming for a 20–25 point move from that level). Pressure on the pound will return today in the event of strong data.Important! Before selling, make sure 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 case of two consecutive tests of the 1.3505 level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.3482 and 1.3452 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 level where you can set Take Profit or manually lock in profits, 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 level where you can set Take Profit or manually lock in profits, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to rely on overbought and oversold zones.

Important: Beginner Forex traders must be very cautious when making market entry decisions. Before the release of important 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 quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

Remember, successful trading requires a clear trading plan, such as the one outlined 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