FX.co ★ GBP/USD: Tips for Beginner Traders on January 14th (U.S. Session)

Trade review and trading advice for the British pound

The test of the 1.3447 price level occurred at a moment when the MACD indicator was just beginning to move upward from the zero line, which confirmed a correct entry point for buying the pound. As a result, the pair rose by only 9 points, after which the bullish potential was exhausted.

A speech by Bank of England official Alan Taylor had no impact on the British pound. The market remained indifferent to the official's moderately optimistic remarks, preferring to wait for more substantial catalysts for movement. Despite analysts' attempts to find hints about future monetary policy in Taylor's words, the speech provided no clear signals. His assessment of the current economic situation in the UK remained neutral, pointing neither to the need for urgent easing nor to the possibility of imminent tightening. Traders were likely looking for more convincing evidence of a sustainable recovery in the British economy.

Next, the U.S. Producer Price Index will provide important information about inflationary pressure in the economy. Higher-than-expected readings could signal further growth in consumer prices, which in turn could push the Federal Reserve toward a more cautious monetary policy stance. Conversely, weaker figures could ease inflation concerns and lead to a more accommodative approach from the Fed. Changes in retail sales will help assess consumer spending, which is a key driver of economic growth. However, the most influential events will be speeches by FOMC members, particularly Neel Kashkari, Raphael Bostic, and John Williams. Traders will be looking for any hints of a shift in the central bank's stance on inflation, employment, and economic growth. Disagreements among FOMC members could also affect market expectations and trigger volatility.

As for the intraday strategy, I will rely more on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy the pound today if the entry point around 1.3457 is reached (green line on the chart), with a target of growth toward the 1.3475 level (thicker green line on the chart). Around 1.3475, I will exit long positions and open short positions in the opposite direction (expecting a move of 30–35 points in the opposite direction from that level). Pound appreciation today can be expected only after a decline in U.S. inflation.Important! Before buying, make sure the MACD indicator is above the zero line and is 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 1.3442 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal of the market upward. Growth toward the opposite levels of 1.3457 and 1.3475 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound today after a break below the 1.3442 level (red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be the 1.3419 level, where I will exit short positions and also immediately open long positions in the opposite direction (expecting a move of 20–25 points in the opposite direction from that level). Pressure on the pound may return today if U.S. inflation rises.Important! Before selling, make sure the MACD indicator is below the zero line and is 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 1.3457 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal of the market downward. A decline toward the opposite levels of 1.3442 and 1.3419 can be expected.

What's on the chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price where Take Profit can be set or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price where Take Profit can be set or profits can be taken manually, 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 need to be extremely cautious when making market entry decisions. Ahead of major fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can very quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

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