Trade Review and Tips for Trading the British Pound

The price test at 1.3416 came as the MACD indicator began moving down from the zero line, confirming the right entry point to sell the pound. As a result, the pair declined toward the target area of 1.3383.

Statements by US policymakers supported the dollar at the end of last week, but the pound held up under pressure. The Bank of England meeting on November 5, with an expected rate hike, helps the pound, although new Federal Reserve arguments are increasingly boosting demand for the dollar. Today the pound may receive support in the first half of the day after UK data. The manufacturing PMI for October is expected. The forecast is 52.8 points, the same as the previous value, and it should be compared with the data from prior months. In September, the index was 51.9, while the preliminary October estimate showed 52.8 against the expected 51.8, meaning British industry moved to a noticeably higher level. If the final figure beats economists' forecasts, the pound will gladly return to last week's high.

As for the intraday strategy, I will rely more on scenarios No. 1 and No. 2.

Scenarios to Buy

Scenario No. 1: I plan to buy the pound today when the entry point around 1.3425 (green line on the chart) is reached, with a target of rising to 1.3457 (thicker green line on the chart). Around 1.3457, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip move away from the level). Expect pound growth today only after strong data. Important! Before buying, make sure the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today in the event of two consecutive tests of the 1.3399 price while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward reversal. You can expect a rise to the opposite levels of 1.3425 and 1.3457.

Scenarios to Sell

Scenario No. 1: I plan to sell the pound today after the 1.3399 level is breached (red line on the chart), which will lead to a rapid decline of the pair. The key target for sellers is 1.3373, where I plan to exit shorts and immediately open longs in the opposite direction (expecting a 20–25 pip move away from the level). Bad news will bring pressure back on the pound. Important! Before selling, make sure the MACD indicator is below the zero line and is just beginning to fall from it.

Scenario No. 2: I also plan to sell the pound today in the event of two consecutive tests of 1.3425 while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward reversal. You can expect a decline to the opposite levels of 1.3399 and 1.3373.

What's on the Chart:

Thin green line – the entry price at which you can buy the trading instrument;

Thick green line – the suggested price where you can place a Take Profit or manually lock in gains, since further upside above this level is unlikely;

Thin red line – the entry price at which you can sell the trading instrument;

Thick red line – the suggested price where you can place a Take Profit or manually lock in gains, since further downside below this level is unlikely;

MACD indicator. When entering the market, it is important to follow the overbought and oversold zones.

Important. Beginner Forex traders must be very cautious when making entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.

Remember, successful trading requires a clear trading plan, like the example I presented above. Spontaneous trading decisions based on the current market situation are a losing strategy for an intraday trader from the start.