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31.10.202415:38 Forex Analysis & Reviews: GBPUSD: Simple Trading Tips for Beginner Traders on October 31st (U.S. Session)

Trade Analysis and Tips for Trading the British Pound

The test of the 1.2965 level occurred when the MACD was already well above the zero line, which limited the pair's upward potential, especially given the uncertainty surrounding the pound's direction present in the market yesterday. Therefore, I did not buy the pound. Selling on a bounce at 1.2990, as discussed in my morning forecast, led to a decline to the 1.2965 area, yielding approximately 20 points of profit. There's plenty of statistical data later in the day, which is positive. The initial jobless claims data in the U.S. is less crucial than the core Personal Consumption Expenditures (PCE) index, the Federal Reserve's preferred inflation measure. A decrease in this index would support selling the dollar and buying the pound, as it would reduce the Fed's justification for keeping rates high. As for the intraday strategy, I'll focus on Scenarios 1 and 2.

Buy Signal

• Scenario 1: Today, I plan to buy the pound at the 1.2997 level (green line on the chart), aiming for an increase to the 1.3025 level (thicker green line on the chart). At 1.3025, I will exit the purchases and open sell positions in the opposite direction, targeting a 30-35 point move in the opposite direction. The pound's growth today may only be viable following weak U.S. data. Important: Before buying, ensure the MACD is above the zero line and just beginning its upward move.
• Scenario 2: I also plan to buy the pound today if there are two consecutive tests of the 1.2977 level when the MACD is in the oversold area. This will limit the pair's downward potential and prompt an upward reversal. Growth toward the opposing levels of 1.2997 and 1.3025 can be expected.

Sell Signal

• Scenario 1: I plan to sell the pound after a break below the 1.2977 level (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers is the 1.2941 level, where I'll exit the sell trades and then buy, aiming for a 20-25 point move from that level. Sellers are likely to take action following strong economic reports. Important: Before selling, ensure the MACD is below the zero line and just beginning its decline.
• Scenario 2: I also plan to sell the pound today if there are two consecutive tests of the 1.2997 level, with the MACD in the overbought area. This will limit the pair's upward potential and prompt a downward reversal. A decline toward the opposing levels of 1.2977 and 1.2941 can be expected.

On the Chart:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – suggested price where Take Profit can be placed, or profit can be taken manually, as further growth beyond this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – suggested price where Take Profit can be placed, or profit can be taken manually, as further decline beyond this level is unlikely;
• MACD – for market entry, it's important to consider overbought and oversold zones.

Important: Beginner Forex traders should make entry decisions cautiously. Before the release of important fundamental reports, it's best to stay out of the market to avoid sudden rate fluctuations. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you risk losing your entire deposit quickly. This is especially true if you don't use money management and trade large volumes.

And remember, for successful trading, you need a clear trading plan, like the one outlined above. Making spontaneous trading decisions based on the current market situation is often counterproductive for an intraday trader.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Jakub Novak,
Analytical expert of InstaSpot
© 2007-2024

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