Analysis and Trading Advice for GBP/USD

The test of the 1.2204 level in the first half of the day coincided with the MACD indicator starting its downward movement from the zero mark, confirming a valid sell entry for GBP. However, as shown on the chart, nothing significant came of it.

While the news about a decline in UK GDP caused a brief reaction in the forex market, deeper analysis suggests traders were already anticipating such statistics, limiting the impact on the pound. It seems this negative factor was already priced into strategies, helping GBP avoid significant fluctuations. The weak economic performance was expected and didn't shock market participants. The British economy faces challenges, including high inflation and trade uncertainty, putting pressure on consumer spending and investments, which in turn restrict GDP growth. Markets have adapted to these conditions, and traders continue to analyze data for further opportunities.

The upcoming US jobless claims data may provide better directional cues for traders. Weak data could indicate ongoing economic difficulties, boosting confidence in the pound and potentially sparking GBP/USD growth. Conversely, strong data would likely strengthen the US dollar further.

For intraday trading, I'll focus on Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: Today, I plan to buy GBP at 1.2218 (green line on the chart) with a target of 1.2268 (thicker green line on the chart). At 1.2268, I'll exit the market and open sell positions, expecting a pullback of 30–35 points. GBP growth today hinges on weak US data.Important: Before buying, ensure the MACD indicator is above the zero mark and just starting to rise from it.

Scenario #2: I also plan to buy GBP if there are two consecutive tests of the 1.2184 level, with the MACD indicator in oversold territory. This scenario would limit the pair's downward potential and lead to a market reversal upward. Targets include 1.2218 and 1.2268.

Sell Signal

Scenario #1: I plan to sell GBP after breaking below 1.2184 (red line on the chart), which could lead to a quick decline. The key target for sellers will be 1.2149, where I'll exit sales and open immediate buy positions, expecting a pullback of 20–25 points. Sellers could emerge at any time if the data is strong.Important: Before selling, ensure the MACD indicator is below the zero mark and just starting to decline from it.

Scenario #2: I also plan to sell GBP in case of two consecutive tests of the 1.2218 level, with the MACD indicator in overbought territory. This scenario would limit the pair's upward potential and prompt a downward reversal. Targets include 1.2184 and 1.2149.

Chart Legend

• Thin Green Line: Entry price for buying the instrument.
• Thick Green Line: Anticipated price for setting Take Profit or manually locking in profits, as further growth above this level is unlikely.
• Thin Red Line: Entry price for selling the instrument.
• Thick Red Line: Anticipated price for setting Take Profit or manually locking in profits, as further declines below this level are unlikely.
• MACD Indicator: When entering the market, consider overbought and oversold zones.

Important Notes

Beginner traders on the Forex market must exercise extreme caution when making trading decisions. Before major fundamental reports are released, it's best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news events, always set stop-loss orders to minimize losses. Without stop-loss orders, you risk losing your entire deposit, especially when trading large volumes without proper money management.

Remember, successful trading requires a well-defined trading plan like the one outlined above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.