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04.10.202409:07 Forex Analysis & Reviews: GBP/USD: Simple Trading Tips for Novice Traders on October 4. Analysis of Yesterday's Forex Trades

Trade Analysis and Tips for Trading the British Pound

The test of the 1.3104 price happened when the MACD indicator had already moved significantly downward from the zero mark, which limited the pair's downward potential. For this reason, I didn't sell the pound. Shortly after, there was another test of 1.3104, this time with the MACD in the oversold zone, leading to the implementation of the second buying scenario. As a result, the pair recovered by 20 pips, after which buying interest quickly subsided. Strong U.S. ISM data on non-manufacturing activity limited the pair's upward correction potential during the U.S. session. Today, traders will focus on the UK Construction PMI and speeches from MPC member Huw Pill and Bank of England Deputy Governor for Financial Stability Sarah Breeden. Their remarks may hint at more aggressive rate cuts, given the recent struggles of the economy, which could further weaken the pound. As for the intraday strategy, I'll primarily focus on implementing scenarios #1 and #2.

Exchange Rates 04.10.2024 analysis

Buy Signal

Scenario #1: Today, I plan to buy the pound when it reaches the entry point around 1.3137 (green line on the chart) to rise to the 1.3165 level (thicker green line on the chart). At the 1.3165 area, I plan to exit the buy position and open a sell position in the opposite direction, aiming for a movement of 30-35 pips in the opposite direction from that level. The rise of the pound can only be expected if there is strong data. Important! Before buying, ensure the MACD indicator is above the zero mark and starting to rise.

Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the 1.3121 price when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upwards. Growth towards the opposite levels of 1.3137 and 1.3165 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after it breaks below the 1.3121 level (red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be the 1.3096 level, where I plan to exit the sell position and immediately open a buy position in the opposite direction (anticipating a movement of 20-25 pips in the opposite direction from that level). Selling the pound can continue in line with the bearish market. Important! Before selling, make sure the MACD indicator is below the zero mark and starting to decline from it.

Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the 1.3137 price when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline to the opposite levels of 1.3121 and 1.3096 can be expected.

Exchange Rates 04.10.2024 analysis

What's on the Chart:

Thin green line: Entry price at which you can buy the trading instrument.

Thick green line: The anticipated price where you can set Take Profit or manually lock in profits, as further growth above this level is unlikely.

Thin red line: Entry price at which you can sell the trading instrument.

Thick red line: The anticipated price where you can set Take Profit or manually lock in profits, as further decline below this level is unlikely.

MACD Indicator: When entering the market, it is important to be guided by overbought and oversold zones.

Important: Novice traders in the forex market should be cautious when making market entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid sudden exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. You can quickly lose your entire deposit without stop orders, especially if you do not use money management and trade in large volumes.

And remember, for successful trading, you need to have a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.

*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.

Jakub Novak,
Analytical expert of InstaSpot
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