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02.12.202409:59 Forex Analysis & Reviews: GBP/USD: Simple Trading Tips for Beginner Traders on December 2. Analysis of Forex Trades

Analysis of Trades and Trading Recommendations for the British Pound

The test of the 1.2706 price 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. Shortly after, another test at 1.2643 coincided with the MACD being in the overbought zone, which allowed for the execution of Scenario #2 for selling. However, the pair only dropped by 15 pips, and no significant downward movement followed.

Today, traders will closely monitor the UK manufacturing activity report, a key indicator of the economy's health. A decline in figures could lead traders to anticipate further measures by the Bank of England, which would pressure the pound sterling. If the data is significantly worse than expected, it could trigger a broad sell-off of the British currency. Against the backdrop of global economic turmoil and uncertainty surrounding the U.S.'s new trade policy, the pound's observed growth might prove unstable. Traders are increasingly cautious, which could cause additional fluctuations in GBP quotes. Expectations of reduced appetite for riskier assets could increase demand for safe-haven currencies such as the U.S. dollar, renewing pressure on the GBP/USD pair. As for the intraday strategy, I will rely primarily on the implementation of Scenarios #1 and #2.

Exchange Rates 02.12.2024 analysis

Buy Scenarios

Scenario #1:

I plan to buy the pound today if the entry point around 1.2706 (green line on the chart) is reached, targeting growth to the level of 1.2754 (thicker green line on the chart). Around 1.2754, I plan to exit the buy positions and open sell positions in the opposite direction, aiming for a movement of 30–35 pips down from the level. Expecting pound growth today depends on strong data. Important! Before buying, ensure that the MACD indicator is above the zero mark and starting to rise.

Scenario #2:

I also plan to buy the pound today in the event of two consecutive tests of the 1.2681 price level when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward reversal. Growth can be expected to the opposing levels of 1.2706 and 1.2754.

Sell Scenarios

Scenario #1:

I plan to sell the pound today after breaking below the 1.2681 level (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be 1.2636, where I plan to exit sell positions and immediately open buy positions in the opposite direction, aiming for a 20–25 pip movement back up from the level. Selling the pound is possible, but selling it at the highest possible levels is better. Important! Before selling, ensure that the MACD indicator is below the zero mark and starting to decline.

Scenario #2:

I also plan to sell the pound today in the event of two consecutive tests of the 1.2706 price level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline can be expected to the opposing levels of 1.2681 and 1.2636.

Exchange Rates 02.12.2024 analysis

What's on the Chart:

  • Thin green line: Entry price for buying the trading instrument.
  • Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
  • Thin red line: Entry price for selling the trading instrument.
  • Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
  • MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Notes for Beginner Forex Traders:

  • Always approach market entry decisions cautiously.
  • Avoid trading during major news releases to sidestep volatile price swings.
  • If trading during news releases, always set stop-loss orders to minimize losses.
  • Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
  • A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous 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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