The test of the price at 1.3276 coincided with a period when the MACD indicator had risen significantly from the zero mark, which limited the pair's bullish potential. For this reason, I did not buy the pound. The second test at 1.3267 aligned with the MACD indicator being in the overbought area, prompting the implementation of Scenario #2: selling the euro. As a result, the pair declined by 40 pips.
On Friday, the dollar demonstrated resilience, awaiting more significant signals from the American market. Investors seemed to decide not to pay much attention to the latest weak data, preferring to await further developments in the Middle East. Weakness in consumer spending, which is a primary driver of the American economy, has traditionally raised concerns, and the January figures only confirmed the emerging trend of a slowdown. The trend of slowing US economic growth began even before the escalation of geopolitical tensions in the Middle East, so nothing good is expected in the first quarter of this year.
Today, there will be no UK data, which may cast doubt on the further strengthening of the British pound observed during the Asian trading session. The lack of fresh macroeconomic indicators from the United Kingdom eliminates new stimuli for the growth of the British currency, making it vulnerable. The upward momentum that contributed to the British pound's earlier success this week was largely driven by expectations and technical factors. However, without fundamental support, such dynamics may prove unsustainable.
Regarding the intraday strategy, I will primarily rely on implementing scenarios #1 and #2.
Scenario #1: I plan to buy the pound today when the price reaches around 1.3276 (green line on the chart), with a target for growth to 1.3315 (thicker green line on the chart). At around 1.3315, I plan to exit my long positions and open shorts in the opposite direction (expecting a movement of 30-35 pips back from the level). The pound's growth today seems unlikely. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting an upward move from it.
Scenario #2: I also plan to buy the pound today if the price tests 1.3245 twice in a row, when the MACD indicator is in the oversold area. This will limit the downward potential of the pair and lead to a market reversal upwards. One can expect growth to the opposite levels of 1.3276 and 1.3315.
Scenario #1: I plan to sell the pound today after the price updates to 1.3245 (red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be the level of 1.3193, where I plan to exit my shorts and also open longs in the opposite direction immediately (expecting a movement of 20-25 pips back from the level). Sellers of the pound may manifest at any moment. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting its downward move.
Scenario #2: I also plan to sell the pound today if two consecutive tests of 1.3276 occur while the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a market reversal downwards. One can expect a decline to the opposite levels of 1.3245 and 1.3193.
Important: Beginner traders in the forex market need to make entry decisions very carefully. It is best to stay out of the market before the release of important fundamental reports to avoid sharp fluctuations in prices. If you choose to trade during the release of news, always set Stop Loss orders to minimize losses. Without placing Stop Loss orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember, successful trading requires a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.
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