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23.11.2022 09:24 AM
Trading tips for beginners. Overview of yesterday's trading. GBP/USD on November 23, 2022

Analysis and tips on how to trade GBP/USD

The price tested the mark of 1.1859 at the moment the MACD just began to go up from the zero level, which confirmed the buy signal. The quote gained over 40 pips but failed to go above 1.1920. No more entry points were created.

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The UK's public sector net borrowing results had no influence on the pound. Therefore, the pair moved sluggishly. Today is going to be a busy day in the market as a series of important macro results will be published. The United Kingdom will see the release of business activity statistics in the manufacturing and services sectors. Likewise, data on the UK's composite PMI will come out. A decrease in the index may trigger a fall in the pound in the first half of the day. The pound may feel additional pressure following the statements of some Bank of England officials. For example, Huw Pill's speech may push the sterling to weekly lows. In the second half of the day, similar data will be delivered in the United States as well as data on initial jobless claims and new home sales. The greenback may post bigger losses if the state of the housing market deteriorates. Meanwhile, traders will focus primarily on the FOMC Minutes. If the report hints at the possibility of a reduction in the pace of rate hikes, the pair may surge to monthly highs.

Buy signal

Scenario 1: long positions could be opened today when the quote touches the mark of 1.1903 (green line of the chart) with the target at 1.1945 (thick green line) where it would be wiser to close buy trades and sell the pound, allowing a correction of 30-35 pips. The pair may show growth in the case of upbeat data in the United Kingdom. Important! Before buying the instrument, make sure the MACD is above zero and just starts moving up from this level.

Scenario 2: it will become possible to go long when the price reaches 1.1872 with the MACD being in the oversold zone. This would limit the pair's downside potential and lead to a bullish reversal in the market. The quote may go either to 1.1903 or 1.1945.

Sell signal

Scenario 1: today, short positions could be considered when the price tests the mark of 1.1872 (red line on the chart), which may trigger a fall in the price. The target is seen at 1.1830 where it would be wiser to close sell trades and go long, allowing a correction of 20-25 pips. The sterling may feel stronger pressure if UK macro data comes disappointing. Important! Before selling the instrument, make sure the MACD is below zero and just starts moving down from this level.

Scenario 2: the pound could be sold today when the price approaches 1.1903 and the MACD is in the overbought zone at the same time. This could limit the pair's upside potential and lead to a bearish reversal in the market. The quote may then go either to 1.1872 or 1.1830.

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Indicators on charts:

The thin green line indicates a buy entry point.

The thick green line is the estimated price where you should place a take-profit order or close positions manually since the quote is unlikely to grow above this level.

The thin red line indicates a sell entry point.

The thick red line is the estimated price where you should place a take-profit order or close positions manually since the quote is unlikely to fall below this level.

MACD. When entering the market, it is important to pay attention to the overbought and oversold zones.

Remember that novice forex traders should be very careful when deciding to enter the market. Before the release of important fundamentals, you should stay out of the market in order to avoid sharp fluctuations in the rate. If you decide to trade during news releases, make sure always to place a stop-loss order to minimize losses. Without it, you may quickly lose your entire deposit, especially if you do not use money management but trade large volumes.

Remember that in order to succeed in the market, you should have a clear trading plan, like the one I presented above. Spontaneous decisions based on the current state of the market are a losing strategy for an intraday trader.

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