FX.co ★ GBP/USD: Tips for Beginner Traders on November 10

Trade review and tips for trading the British Pound

The price test at 1.3454 occurred when the MACD indicator was already well above the zero line, limiting the pair's upside potential. A second test of 1.3454 triggered Scenario No. 2 for selling the pound, resulting in a 30-pip decline.

This morning the pound held up reasonably well but then gave back gains. UK data were limited to the BRC retail sales monitor, which rose 1.1% versus a forecast of 1.2% and 1.0% a month earlier, so the main focus remains on remarks from British and US policymakers. Last night in Zurich, Bank of England Governor Andrew Bailey spoke, but not about rates — he talked about trade. As head of the central bank, he declined to judge whether Brexit was the right move or whether political relations with the EU should change, but he emphasized that any reduction in openness to trade weighs on growth and productivity, and that opportunities to expand sales markets, including in the EU and Switzerland, should be used when possible.

Now the floor goes to Christopher Waller and Michelle Bowman. Both previously belonged to the Federal Reserve's cautious wing, and their tone will show how broadly a hawkish consensus is forming in the committee. On October 28, the Fed left rates unchanged with a 10–2 vote, with Cook and Hammock voting for a hike, and in early September Waller said he would be ready to hold the rate if inflation progressed. If he and Bowman shift toward supporting a December hike, that would carry more weight than comments by Goolsbee and Barkin because it would come from officials who earlier resisted pushing for tightening.

For intraday strategy, I will mainly rely on the implementation of scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy the pound today when the entry point around 1.3435 (green line on the chart) is reached, with a target of rising to 1.3453 (thicker green line on the chart). Around 1.3453, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 pip move away from the level). The pound's rise today can be expected after weak US data. 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 if it tests 1.3421 twice while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward reversal. You can expect a rise to the opposite levels of 1.3435 and 1.3453.

Sell Signal

Scenario No. 1: I plan to sell the pound today after the 1.3421 level is breached (red line on the chart), which will lead to a rapid decline of the pair. The key target for sellers is 1.3400, where I will exit shorts and immediately open longs in the opposite direction (expecting a 20–25 pip move away from the level). Strong pressure on the pound will return with good US data. Important! Before selling, make sure the MACD indicator is below the zero line and is just beginning to fall from it.

Scenario No. 2: I also plan to sell the pound today in the event of two consecutive tests of 1.3435 while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward reversal. You can expect a decline to the opposite levels of 1.3421 and 1.3400.

What's on the Chart:

Thin green line – the entry price at which you can buy the trading instrument;

Thick green line – the suggested price where you can place a Take Profit or manually lock in gains, since further upside above this level is unlikely;

Thin red line – the entry price at which you can sell the trading instrument;

Thick red line – the suggested price where you can place a Take Profit or manually lock in gains, since further downside below this level is unlikely;

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

Important. Beginner Forex traders must be very cautious when making entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.

Remember, successful trading requires a clear trading plan, like the example I presented above. Spontaneous trading decisions based on the current market situation are a losing strategy for an intraday trader from the start.