GBP/USD: Simple Trading Tips for Beginner Traders on September 26. Analysis of Yesterday's Forex Trades

[Ben Graham]

Trade Review and Advice on Trading the British Pound

Testing the 1.3441 level coincided with the moment when the MACD indicator was just beginning to move downward from the zero line, confirming a good entry point for selling the pound. As a result, the pair dropped by more than 100 pips.

The pace of US economic growth, revised upward to 3.8%, delivered a strong boost to the US dollar and, as a result, triggered a weakening in the British pound. This unexpected GDP growth for Q2 signals more resilience in the American economy than previously expected. The strengthening of the dollar, driven by favorable economic data, inevitably put pressure on other currencies, particularly the pound. Investors seeking greater stability and yield shifted their assets towards the US currency, further worsening the pound's situation.

Today, there's no UK economic data, meaning pound buyers have a chance for a slight correction. This opportunity window, opened by the absence of macroeconomic publications, may serve as a brief respite for the pound's battered bears, who recently faced a massive onslaught from dollar bulls. However, remember that any correction is just a minor relief after a long race, not the finish line. The fundamental problems weighing on the British currency haven't disappeared. High inflation and the Bank of England's restrictive stance all continue to pose significant obstacles for a sustained pound recovery.

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

Buy Scenario

Scenario #1: I plan to buy the pound today if an entry point is reached near 1.3369 (the green line on the chart), targeting a rise to 1.3403 (the thicker green line on the chart). Near 1.3403, I plan to exit long positions and open shorts in the opposite direction (looking for a 30-35 pip reversal from the level). A strong pound rally is unlikely today. Important! Before buying, ensure the MACD indicator is above zero and is just beginning to move higher from the zero line.

Scenario #2: I also plan to buy the pound if there are two consecutive tests of the 1.3345 price while the MACD is in oversold territory. This will limit the downside potential and lead to a reversal upwards. Growth to 1.3369 and 1.3403 can be expected.

Sell Scenario

Scenario #1: I plan to sell the pound after the 1.3345 level (red line on the chart) is updated, which will likely trigger a quick decline in the pair. The key bearish target is 1.3304, where I plan to close shorts and open immediate longs in the opposite direction (targeting a 20–25 pip reversal off the level). Pound sellers could become active at any moment. Important! Before selling, ensure the MACD is below zero and is just beginning to drop from the zero line.

Scenario #2: I also plan to sell the pound if there are two consecutive tests of the 1.3369 level while the MACD is in overbought territory. This will limit the upside and trigger a downside reversal. A decline toward 1.3345 and 1.3304 can be expected.

What's on the Chart:

Thin green line – entry price at which the instrument can be bought.

Thick green line – suggested price for taking profit or manually securing profits, as further growth above this level is unlikely.

Thin red line – entry price at which the instrument can be sold.

Thick red line – suggested price for taking profit or manually securing profits, as further decline below this level is unlikely.

MACD indicator: When entering the market, it is important to refer to overbought and oversold areas.

Important. Beginner forex traders should exercise extreme caution when making entry decisions. Before important fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during the release of news, always use stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes. And remember: for successful trading, you need a clear trading plan, as I described above. Making spontaneous trading decisions based on the current market situation from moment to moment is a losing strategy for an intraday trader.

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