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29.11.202411:05 Forex Analysis & Reviews: GBP/USD: Simple Trading Tips for Beginner Traders on November 29th. Analysis of Yesterday's Forex Deals

Analysis of Deals and Trading Tips for the British Pound

The test of the 1.2643 level occurred when the MACD indicator had already moved significantly above the zero mark, limiting the pair's upward potential. For this reason, I didn't buy the pound. Later during the US session, another test of 1.2643 coincided with the MACD entering the overbought zone, allowing for a market entry based on Scenario #2 for selling. However, as seen on the chart, the pair failed to produce a strong downward movement.

Today brings several key statistics. An increase in the Nationwide House Price Index may signal a recovery in the UK's real estate sector. Investors often view rising house prices as a positive sign of economic activity, which may strengthen the British pound. However, it is important to consider that rising house prices could also heighten inflationary pressure, posing challenges for the Bank of England.

Changes in the M4 Money Supply also deserve attention, as they may reflect broader financial conditions in the UK. Persistent increases in the money supply could further fuel inflation, necessitating more decisive action from the central bank. While these indicators may initially seem promising, they carry significant underlying risks.

Investors will also focus on Andrew Bailey's speech, during which he is expected to outline his stance on interest rates. If he confirms an intention to maintain or increase rates, the pound could strengthen. However, this might also signal potential recession risks, complicating the outlook for the currency.

For intraday strategy, I will primarily rely on Scenarios #1 and #2.

Buy Scenarios

• Scenario #1: Plan to buy the pound at 1.2720 (green line on the chart), targeting a rise to 1.2775 (thicker green line). Exit long positions at 1.2775 and open short positions in the opposite direction, anticipating a 30–35 point pullback.Important: Ensure the MACD indicator is above the zero mark and starting to rise before buying.
• Scenario #2: Buy the pound after two consecutive tests of 1.2690, provided the MACD indicator is in the oversold zone. Expect a reversal to 1.2720 and 1.2775.

Sell Scenarios

• Scenario #1: Sell the pound after breaking below 1.2690 (red line), targeting a decline to 1.2636. Exit short positions at 1.2636 and open long positions in the opposite direction, anticipating a 20–25 point pullback.Important: Ensure the MACD indicator is below the zero mark and starting to decline before selling.
• Scenario #2: Sell the pound after two consecutive tests of 1.2720, provided the MACD indicator is in the overbought zone. Anticipate declines toward the support levels of 1.2690 and 1.2636.

What's on the chart:

• Thin Green Line: Entry price for buying the trading instrument.
• Thick Green Line: Suggested price for placing Take Profit or locking in profits, as further growth above this level is unlikely.
• Thin Red Line: Entry price for selling the trading instrument.
• Thick Red Line: Suggested price for placing Take Profit or locking in profits, as further declines below this level are unlikely.
• MACD Indicator: Pay attention to overbought and oversold zones when entering the market.

Important for Beginners

Forex traders should approach market entry with caution. It is best to stay out of the market before the release of key fundamental reports to avoid unexpected price swings. When trading during news events, always place stop-loss orders to minimize risk. Trading without stop-loss orders can lead to rapid losses, especially when trading large volumes without proper money management.

Successful trading requires a well-defined plan, like the example outlined above. Spontaneous decisions based on current market conditions are inherently a losing strategy for intraday traders.

*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
© 2007-2024

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