GBP/USD: Simple Trading Tips for Beginner Traders on October 15. Review of Yesterday's Forex Trades

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Trade Review and Advice for Trading the British Pound

The test of the 1.3284 level coincided with the MACD indicator having already moved significantly above the zero line, which limited the pair's bullish potential. The second test of this level occurred while MACD was in the overbought zone, triggering the implementation of Sell Scenario No. 2. However, the anticipated decline in the pair did not materialize.

The pound surged sharply on Tuesday after Federal Reserve Chair Jerome Powell signaled that the U.S. central bank plans to lower the key interest rate by 0.25% at the end of the month. The market reacted instantly with widespread buying of the British currency, as investors interpreted Powell's comments as a signal of U.S. economic weakness and, consequently, decreased attractiveness of the dollar. His announcement came as a surprise to many analysts who had expected a more cautious Fed stance, especially given the absence of new U.S. labor market data. Powell justified the need to cut rates based on continued risks tied to economic uncertainty, trade tensions, and fears of a rising unemployment rate.

No economic data is scheduled for release from the UK today. However, speeches are expected from Sir David Ramsden, Deputy Governor of the Bank of England responsible for markets and banking, and Sarah Breeden, a member of the Financial Policy Committee. Sir David's speech is of particular interest. He is expected to provide an updated assessment of the health of the UK banking system and detail the BoE's efforts to support financial stability. Sarah Breeden, representing the Financial Policy Committee, will likely focus on broader macroeconomic threats. Her comments on the state of the economy and inflation outlook will be closely studied, as the committee plays a key role in formulating the UK's macroprudential policy.

As for today's intraday strategy, I will primarily focus on implementing Scenarios No. 1 and No. 2.

Buy Scenarios

Scenario 1: I plan to buy the pound today if the entry point at 1.3367 (thin green line on the chart) is reached, with a target at 1.3416 (thick green line). Around 1.3416, I will close long positions and consider opening short positions on a reversal, expecting a pullback of 30–35 pips. This buying strategy should only be applied if the BoE assumes a hawkish tone.

Important: Before buying, make sure the MACD indicator is above the zero line and just beginning to rise.

Scenario 2: I also plan to buy the pound today in the event of two consecutive tests of 1.3342 while the MACD indicator is in the oversold zone. This would limit the pair's downside and may lead to a reversal upward. A price move toward 1.3367 and 1.3416 should be expected.

Sell Scenarios

Scenario 1: I plan to sell the pound today if the market breaks below 1.3342 (thin red line on the chart), triggering a quick drop. The primary target would be 1.3304 (thick red line). I plan to exit short positions there and consider immediate long entries on a bounce from the level, with an expected pullback of 20–25 pips. Pound sellers are likely to trade cautiously.

Important: Before selling, ensure that the MACD indicator is below the zero line and has just started to decline.

Scenario 2: I also plan to sell the pound today in the event of two consecutive tests of the 1.3367 level while MACD is in the overbought zone. This would signal limited upside potential and may lead to a downward reversal toward 1.3342 and 1.3304.

Chart Notes

• Thin green line: Entry level for buy positions
• Thick green line: Target level for taking profit or manually exiting a long position
• Thin red line: Entry level for sell positions
• Thick red line: Target level for taking profit or manually exiting a short position
• MACD indicator: Use overbought and oversold zones as guidance for trade timing

Important for Beginners

Beginner traders in the forex market should make trade decisions with utmost caution. During the release of key economic data, it is often best to stay out of the market to avoid erratic price swings. If you choose to trade during such events, always use stop-loss orders to control risk. Trading without stop-losses can result in rapid loss of your entire deposit, especially if proper money management practices are not in place.

And remember: successful trading requires a clear, structured plan—such as the one presented here. Random trade decisions based on short-term price fluctuations are not a viable strategy for any intraday trader.

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