FX.co ★ GBP/USD: Simple Trading Tips for Beginner Traders on July 15. Forex Trade Analysis

Trade Analysis and Tips for Trading the British Pound

The price test at 1.3390 coincided with the moment when the MACD indicator had moved significantly above the zero mark, which, in my opinion, limited the pound's upward potential. For this reason, I did not buy the pair.

Yesterday's sharp discrepancy between the actual and expected figures set the tone for trading and weakened the dollar, while the alignment of the release with Kevin Warsh's first comments before Congress only amplified the effect. The data showed that the month-on-month dynamics of American inflation were particularly telling: prices decreased by 0.4 percent instead of the expected 0.1 percent decline, while May recorded a 0.5 percent rise. Such a noticeable disinflationary shift weakened arguments for a hawkish stance by the Federal Reserve and deprived the dollar of support.

Today's absence of UK macroeconomic reports leaves the pound without its own drivers, making it dependent on external forces. However, the speech by Monetary Policy Committee member Huw Pill is worth noting, as his comments could become the main source of movement for the pair. In a favorable external environment, the pound stands a chance of further growth against the dollar, continuing yesterday's recovery. However, the sustainability of this movement will largely depend on Pill's words, as hints at a more hawkish stance will support the British currency, while a cautious tone will weaken it. Ahead of the speech, the GBP/USD pair will likely maintain a cautiously upward bias, influenced by overall risk appetite and dollar dynamics.

Regarding the intraday strategy, I will primarily rely on the implementation of scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy the pound today at an entry point around 1.3425 (green line on the chart), with a growth target to 1.3450 (thicker green line on the chart). At around 1.3450, I intend to exit my long positions and sell back immediately (expecting a movement of 30-35 pips in the opposite direction from the entry point). We can only anticipate growth in the pound today with a strong position from Pill. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy the pound today in the event of two consecutive tests of 1.3403, with the MACD indicator in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. We can expect a rise to the opposite levels of 1.3425 and 1.3450.

Sell Scenarios

Scenario #1: I plan to sell the pound today after updating the level of 1.3403 (red line on the chart), which will lead to a rapid decline of the pair. The key target for sellers will be 1.3370, where I plan to exit my short positions and immediately buy back (expecting a move of 20-25 pips in the opposite direction from that level). Bad news will put pressure back on the pound. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario #2: I also plan to sell the pound today in the event of two consecutive tests of 1.3425 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. We can expect a decline to the opposite levels of 1.3403 and 1.3370.

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.