The test of the price at 1.3418 coincided with the moment when the MACD indicator was just starting to move down from the zero mark, confirming the correct entry point for selling the pound. As a result, the pair decreased by 20 pips.
Yesterday's data showing a significant increase in the US manufacturing PMI to 55.3 from April's 54.5, combined with a decrease in the services sector indicator, was not enough to provide strong support for the dollar. However, this mixed macroeconomic picture contributed to a slight recovery of the GBP/USD pair, which began to take shape by the middle of the American trading session. Then, market participants shifted their focus from internal economic indicators to external political events, which had a more significant impact on the exchange rate in this case. An additional catalyst for the strengthening of the British pound was the rumors circulating about a potential agreement between the US and Iran. Such news, which has the potential to reduce geopolitical tensions, is typically viewed by markets as a positive factor.
Today's session in the first half of the day is expected to be calm for the GBP/USD pair, as no significant UK data is expected. The absence of macroeconomic news that could influence market direction is likely to keep the instrument within the established sideways channel.
As for the intraday strategy, I will rely more on implementing scenarios #1 and #2.
Scenario #1: I plan to buy the pound today upon reaching the entry point around 1.3435 (the green line on the chart), aiming to rise to 1.3466 (the thicker green line on the chart). At around 1.3466, I plan to exit the long positions and open short positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). A strong rise in the pound can only be expected in the case of good data. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting to rise from it.
Scenario #2: I also plan to buy the pound today if the price tests 1.3418 twice in a row while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. One can expect a rise to the opposite levels of 1.3435 and 1.3466.
Selling ScenariosScenario #1: I plan to sell the pound today after the 1.3418 level is updated (the red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the level of 1.3383, where I plan to exit the shorts and immediately open longs in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Pressure on the pound can return at any moment. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting to decline from it.
Scenario #2: I also plan to sell the pound today if two consecutive tests of 1.3435 occur while the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a market reversal downward. One can expect a decline to the opposite levels of 1.3418 and 1.3383.
Important: Beginner traders in the Forex market need to make entry decisions very cautiously. It is best to stay out of the market before important fundamental reports to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.
And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making impulsive trading decisions based on the current market situation is fundamentally a losing strategy for an intraday trader.