FX.co ★ GBP/USD: Simple Trading Tips for Beginner Traders on July 10. Analysis of Yesterday's Forex Trades

Analysis of Trading the British Pound

The price test at 1.3390 coincided with the MACD indicator moving significantly below the zero mark, limiting the pair's downward potential. For this reason, I did not sell the pound. The second test at 1.3390 aligned with the MACD being in the oversold area, leading to the execution of scenario #2 to buy the pound, resulting in a rise of the pair by 25 pips.

Weak housing market data set the tone for yesterday's trading and weighed on the dollar. US home sales for June came in below expectations, clearly demonstrating how high borrowing costs are cooling demand in the real estate sector. Simultaneously, easing tensions in the Middle East restored risk appetite among investors, further diminishing the need for the safe-haven dollar and pushing capital into more lucrative instruments. The British pound seized the moment and strengthened against the dollar, as the return of risk appetite and the weakening of the American currency played in its favor, supporting demand for more risky assets.

Today's absence of UK macroeconomic reports in the first half of the day will set the direction for the pound. Without fresh figures on inflation, employment, or business activity, traders will have no reason to revise their positions, and these indicators typically guide expectations regarding Bank of England rates and determine the direction of the British currency. When such reports are lacking, the pound becomes dependent on external forces, and the main reference for today will remain the sentiment surrounding the dollar. This is why the current demand for GBP/USD may persist until the end of the European session.

As for the intraday strategy, I will rely more on implementing scenarios No. 1 and No. 2.

Buy Scenarios

Scenario #1: Today, I plan to buy the pound upon reaching an entry point around 1.3443 (green line on the chart), targeting a move toward 1.3479 (thicker green line on the chart). At 1.3479, I plan to exit my long positions and sell immediately on a retracement, expecting a move of 30-35 pips from the entry point. The pound's growth can be anticipated today as a continuation of the upward trend of recent days. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning to rise from it.

Scenario #2: I also plan to buy the pound today in the case of two consecutive tests of the price 1.3419 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. A rise to the opposing levels of 1.3443 and 1.3479 is expected.

Sell Scenarios

Scenario #1: I plan to sell the pound after breaking the level of 1.3419 (red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be 1.3385, where I plan to exit my short positions and immediately buy in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Bad news will return pressure on the pound. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning its decline from it.

Scenario #2: I also plan to sell the pound today in the case of two consecutive tests of the price 1.3443 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposing levels of 1.3419 and 1.3385 can be expected.

What the Chart Shows:

• The thin green line represents the entry price for buying the trading instrument;
• The thick green line is the estimated price at which to set Take Profit or lock in profits, as further upward movement is unlikely above this level;
• The thin red line is the entry price for selling the trading instrument;
• The thick red line is the estimated price at which to set Take Profit or lock in profits, as further downward movement is unlikely below this level;
• The MACD indicator. It is important to base market entries on overbought and oversold zones.

Important: Beginning traders in the Forex market must make entry decisions very cautiously. Before the release of significant fundamental reports, it is best to stay out of the market to avoid sudden price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I have presented above. Making spontaneous trading decisions based on the current market situation is fundamentally a losing strategy for intraday traders.