GBP/USD: Simple trading tips for novice traders on April 23rd (US session)

Trade Analysis and Tips for Trading the British Pound

The price test at 1.2356 in the first half of the day coincided with the moment when the MACD indicator began to move up from the zero mark, confirming the correct entry point for buying the pound. As a result, the pair rose by 25 points, but that’s where it ended. We have yet to reach the target level of 1.2409. Strong statistics on activity in the UK services sector allowed the pound to recover slightly after yesterday’s sell-off, but the pair’s rise quickly turned into a fall as major sellers did not leave the market. During the American session, the situation may worsen for the pound as strong US data is expected. Pay attention to figures on the business activity index in the manufacturing sector, the business activity index in the services sector, and the composite PMI index of the US. Strong manufacturing activity and activity in the services sector will lead to a new sell-off of GBP/USD. Weak data will only allow for a small correction of the pound within the downward trend. As for the intraday strategy, I will rely more on scenarios #1 and #2.

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Buy Signal

Scenario #1: Today, I plan to buy the pound when the entry point reaches around 1.2368 (green line on the chart), with a target of rising to the level of 1.2415 (thicker green line on the chart). At the level of 1.2415, I will exit the purchases and open sales in the opposite direction (counting on a movement of 30–35 points in the opposite direction from the level). Pound growth today can be expected after weak US data within the ascending correction. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.

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Scenario #2: Today, I also plan to buy the pound in case of two consecutive tests of the price at 1.2335 when the MACD indicator is in the oversold zone. This will limit the downward potential of the pair and lead to a reversal of the market upward. Expect a rise to the opposite levels of 1.2368 and 1.2415.

Sell Signal

Scenario #1: Today, I plan to sell the pound after updating the level of 1.2335 (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the level of 1.2290, where I will exit sales and also immediately open purchases in the opposite direction (counting on a movement of 20–25 points in the opposite direction from the level). Sellers will show themselves in the absence of buyer activity after a small upward correction and strong US data. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario #2: Today, I also plan to sell the pound in case of two consecutive tests of the price at 1.2368 when the MACD indicator is in the overbought zone. This will limit the upward potential of the pair and lead to a reversal of the market downward. Expect a decline to the opposite levels of 1.2335 and 1.2290.

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Chart Information:

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

Thick green line – the estimated price where Take Profit can be set, or profits can be fixed independently, as further growth above this level is unlikely.

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

Thick red line – the estimated price where Take Profit can be set, or profits can be fixed independently, as further decline below this level is unlikely.

MACD indicator. When entering the market, it is important to follow the overbought and oversold zones.

Important. Beginner traders in the forex market need to be very cautious when making entry decisions. It is best to stay out of the market before important fundamental reports are released to avoid being caught in sharp exchange rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You need to place stop orders to avoid losing your entire deposit, especially if you do not use money management and trade with large volumes.

And remember, for successful trading, you need to have a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.

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

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