empty
19.12.2024 08:46 AM
GBP/USD: Simple Trading Tips for Beginner Traders on December 19. Forex Analysis of Yesterday's Trades

Analysis of Trades and Trading Tips for the British Pound

The test of the 1.2701 level occurred when the MACD indicator was beginning to move down from the zero mark, confirming the validity of a sell signal for the pound. This resulted in a decline of more than 100 pips for the pair.

The Federal Reserve's decision to lower interest rates to 4.5% led to a sharp rise in the dollar and a fall in the pound. Typically, such moves have the opposite effect, but this time was different. The expected decision from the Fed significantly impacted currency markets due to the revised forecasts for the coming years. The increased attractiveness of the dollar, as a result of maintaining a stricter monetary policy next year than previously anticipated, strengthened its position against many global currencies, including the British pound. Investors began reassessing their positions, expecting high interest rates in the U.S. to create favorable conditions for investing in American assets.

Today, the market is awaiting the Bank of England's decision on the key interest rate, with many observers anxiously anticipating the outcome. In a rapidly weakening economy, leaving rates unchanged may be interpreted as a signal of uncertainty and insufficient response to current challenges. Economic indicators show slowing growth, rising unemployment, and declining consumer demand, which threaten the economy's continued recovery. It is essential to consider that low interest rates support the economy but can also contribute to inflationary risks. If the BoE decides to keep the rate unchanged, it could erode confidence in its ability to manage instability. As a result, pressure on the pound is likely to persist regardless of the decision made by the central bank.

I will rely more on implementing Scenario #1 and Scenario #2 for today's trading strategy.

This image is no longer relevant

Buy Signal

Scenario #1: Plan to buy the pound today at the 1.2603 entry point (green line on the chart) with a target of 1.2630 (a thicker green line on the chart). At the 1.2630 level, I plan to exit the buy position and open a sell position in the opposite direction (targeting a movement of 30-35 pips downward from the level). However, expecting the pound to rise today seems unlikely.

Important! Before buying, ensure that the MACD indicator is above the zero mark and starting to rise.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.2580 level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. A rise can be expected to the opposing levels of 1.2603 and 1.2630.

Sell Signal

Scenario #1: Plan to sell the pound today after breaking below the 1.2580 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 1.2552 level, where I plan to exit the sell position and immediately open a buy position in the opposite direction (targeting a movement of 20-25 pips upward from the level). Selling the pound would align with yesterday's trend continuation.

Important! Before selling, ensure that the MACD indicator is below the zero mark and starting to decline.

Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.2603 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline can be expected to the opposing levels of 1.2580 and 1.2552.

This image is no longer relevant

Chart Notes

  • Thin green line: Entry price for buying the trading instrument.
  • Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
  • Thin red line: Entry price for selling the trading instrument.
  • Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
  • MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Note for Beginner Traders

  • Always approach market entry decisions cautiously.
  • Avoid trading during major news releases to sidestep volatile price swings.
  • If trading during news releases, always set stop-loss orders to minimize losses.
  • Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
  • A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.
Jakub Novak,
Analytical expert of InstaForex
© 2007-2024
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/JPY: Simple Trading Tips for Beginner Traders on December 30. Review of Forex Trades

The first test of the 157.82 price level occurred when the MACD indicator had already moved significantly above the zero mark, which limited the pair's upward potential. For this reason

Jakub Novak 08:02 2024-12-30 UTC+2

GBP/USD: Simple Trading Tips for Beginner Traders on December 30. Review of Forex Trades

The test of the 1.2570 price level coincided with the MACD indicator moving significantly above the zero mark, which limited the pair's upward potential. For this reason

Jakub Novak 08:02 2024-12-30 UTC+2

EUR/USD: Simple Trading Tips for Beginner Traders on December 30. Review of Forex Trades

The test of the 1.0426 level occurred when the MACD indicator had just begun to move downward from the zero line, confirming the validity of the entry point. However

Jakub Novak 08:02 2024-12-30 UTC+2

Intraday strategies for beginners on December 30

Euro and pound buyers continue to stay active, suggesting a slight recovery in risk assets might be seen by the end of the year. However, amid the empty economic calendar

Miroslaw Bawulski 07:22 2024-12-30 UTC+2

USD/JPY: Simple Trading Tips for Beginner Traders on December 27th (U.S. Session)

The first test of the 157.90 level coincided with the MACD indicator moving significantly above the zero mark, limiting the pair's upward potential. For this reason

Jakub Novak 14:09 2024-12-27 UTC+2

GBP/USD: Simple Trading Tips for Beginner Traders on December 27th (U.S. Session)

The test of the 1.2514 level coincided with the moment when the MACD indicator moved significantly below the zero mark, limiting the pair's downward potential. A similar scenario occurred

Jakub Novak 14:06 2024-12-27 UTC+2

EUR/USD: Simple Trading Tips for Beginner Traders on December 27th (U.S. Session)

Analysis of Trades and Tips for Trading the Euro Currency Pair The test of the 1.0415 level in the first half of the day coincided with the moment when

Jakub Novak 14:02 2024-12-27 UTC+2

USD/JPY: Simple Trading Tips for Beginner Traders on December 27. Review of Yesterday's Forex Trades

The price of 157.48 was tested when the MACD indicator rose significantly above the zero mark, which I believe limited the pair's upward potential. For this reason, I chose

Jakub Novak 09:26 2024-12-27 UTC+2

GBP/USD: Simple Trading Tips for Beginner Traders on December 27. Review of Yesterday's Forex Trades

The test of the 1.2523 price level occurred when the MACD indicator began to move downward from the zero mark, confirming an appropriate entry point for selling the pound. This

Jakub Novak 09:25 2024-12-27 UTC+2

EUR/USD: Simple Trading Tips for Beginner Traders on December 27. Review of Yesterday's Forex Trades

The test of the 1.0412 price level occurred when the MACD indicator had already moved significantly above the zero mark, which limited the upward potential of the currency pair

Jakub Novak 09:25 2024-12-27 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.