03.01.202515:06 Forex Analysis & Reviews: GBP/USD: Simple Trading Tips for Beginner Traders on January 3rd (U.S. Session)

Analysis of Trades and Advice for Trading the British Pound

The test of the 1.2406 level in the first half of the day occurred when the MACD indicator had significantly moved above the zero mark, limiting the pair's upward potential. In a bearish market, I decided not to buy the pound.

Nevertheless, pressure on the GBP/USD pair persists, and current resistance levels remain problematic for buyers. The lack of significant volumes in the first half of the day could indicate a wait-and-see position among market participants ahead of major economic events or data releases. In the coming hours, traders' focus will shift to US data, which continues to influence dollar positioning. The US ISM Manufacturing Index and a speech by FOMC member Thomas Barkin will play a key role in determining market direction. Barkin's speech could set the tone for GBP/USD. If he confirms the Fed's readiness for further rate cuts, it would weaken the dollar. However, any hints of a pause in the easing cycle could strengthen the dollar, creating conditions for a GBP/USD decline.

For intraday strategy, I will focus more on Scenario #1 and #2.

Buy Signal

Scenario #1:Today, I plan to buy the pound upon reaching the 1.2423 level (green line on the chart) with a target of 1.2461 (thicker green line on the chart). At 1.2461, I will exit purchases and open sell positions in the opposite direction, expecting a 30-35 point pullback. Pound growth today can only be expected to continue the upward trend following a dovish Fed stance.Important: Before buying, ensure that the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario #2:I also plan to buy the pound today if there are two consecutive tests of 1.2389, with the MACD indicator in the oversold area. This would limit the pair's downward potential and lead to a market reversal upward. Growth to the opposite levels of 1.2423 and 1.2461 can be expected.

Sell Signal

Scenario #1:I plan to sell the pound after breaking below 1.2389 (red line on the chart), leading to a quick decline in the pair. The key target for sellers will be 1.2355, where I will exit sales and open buy positions in the opposite direction, expecting a 20-25 point pullback. Sellers will emerge in response to strong data and a hawkish Fed stance.Important: Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario #2:I also plan to sell the pound today if there are two consecutive tests of 1.2423, with the MACD indicator in the overbought area. This would limit the pair's upward potential and lead to a market reversal downward. Declines to the opposite levels of 1.2389 and 1.2355 can be expected.

Chart Notes:

• Thin Green Line: Entry price for buying the instrument.
• Thick Green Line: Target price for Take Profit or manual profit-taking, as further growth above this level is unlikely.
• Thin Red Line: Entry price for selling the instrument.
• Thick Red Line: Target price for Take Profit or manual profit-taking, as further declines below this level are unlikely.
• MACD Indicator: When entering the market, focus on overbought and oversold zones.

Important: Beginner Forex traders should approach market entry decisions cautiously. It's best to stay out of the market before significant fundamental reports to avoid sharp price swings. If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without stop-losses, you could quickly lose your entire deposit, especially if you neglect money management and trade large volumes.

Remember, successful trading requires a clear trading plan, such as the one outlined above. Spontaneous trading decisions based on current market conditions are a losing strategy for intraday traders.