29.01.202520:02 Forex Analyse & Reviews: GBP/USD: Simple Trading Tips for Beginner Traders on January 29th (U.S. Session)

Trade Analysis and Recommendations for the British Pound

The test of the 1.2441 level occurred when the MACD indicator had already moved significantly downward from the zero mark, which limited the pair's downward potential. For this reason, I did not sell the pound.

The pound declined as many traders fear that during today's press conference, Fed Chair Jerome Powell will present a new assessment of the economic situation and outline the central bank's future steps, which are expected to be restrictive and hawkish.

Investors are eagerly awaiting clear signals on whether the Fed will continue raising interest rates or shift toward rate cuts. Given market uncertainty, every word from Powell will be scrutinized.

If the Fed maintains a wait-and-see stance and pauses rate adjustments, this could support the U.S. dollar, as investors would interpret it as a sign of economic resilience. Consequently, a stronger dollar would likely pressure other currencies, including the pound, prompting investors to sell GBP/USD more aggressively.

However, if Powell hints at potential rate cuts, the reaction may be mixed. On one hand, it could boost demand for risk assets, but on the other, it might also raise concerns about a potential economic slowdown in the U.S.

For today's intraday trading, I will primarily focus on Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: Buying the pound is possible when the price reaches 1.2440 (green line on the chart), with a target at 1.2492 (thicker green line on the chart). At 1.2492, I plan to exit long trades and initiate a sell position, expecting a 30-35 point pullback from this level. A pound rally today is only likely if the Fed adopts a dovish policy stance.

Important! Before entering a buy trade, ensure that the MACD indicator is above the zero mark and just starting to rise.

Scenario #2: Buying the pound is also an option if the price tests 1.2405 twice in a row, with the MACD indicator in the oversold zone. This setup would limit downside risk and trigger a reversal upward. Potential targets: 1.2440 and 1.2492.

Sell Signal

Scenario #1: Selling the pound is planned after a break below 1.2405 (red line on the chart), which would likely lead to further downside movement. The main bearish target is 1.2370, where I will exit short trades and immediately enter a buy position, expecting a 20-25 point upward correction. A hawkish Fed stance will strengthen sellers' confidence.

Important! Before entering a sell trade, ensure that the MACD indicator is below the zero mark and just starting to decline.

Scenario #2: Selling the pound is also an option if the price tests 1.2440 twice in a row, with the MACD indicator in the overbought zone. This setup would limit upward potential and trigger a market reversal downward. Expected targets: 1.2405 and 1.2370.

Chart Explanation

• Thin green line – Suggested buy entry level
• Thick green line – Expected Take Profit level, where price growth is unlikely to continue
• Thin red line – Suggested sell entry level
• Thick red line – Expected Take Profit level, where further price decline is unlikely
• MACD Indicator – Use overbought and oversold zones for trade confirmation

Important Notes for Beginner Forex Traders

• Be cautious when entering trades. It is best to stay out of the market before major economic releases to avoid excessive volatility.
• If trading during news events, always set stop-loss orders to limit potential losses.
• Without stop-loss protection, your entire deposit could be at risk—especially if you trade with high leverage and large lot sizes.
• Successful trading requires a structured trading plan, like the one outlined above.
• Avoid impulsive trading decisions based on short-term market fluctuations—this is a losing strategy for intraday traders.