Trade Analysis and Tips for the British Pound

The test of the price at 1.3217 coincided with the moment when the MACD indicator was just starting to move upwards from the zero mark, confirming the correct entry point for buying the pound. As a result, the pair rose to the target level of 1.3240.

By the middle of yesterday's American session, the British pound declined on news that the UK government is not planning to actively help the public cope with rising living costs. The limited volume of support measures proposed by the government was the key factor determining the negative dynamics of the currency.

Today, traders will focus on the UK Manufacturing PMI. This indicator, a reliable barometer of economic conditions, reflects views on the current state of the manufacturing sector. The results of this publication can significantly impact the value of the British pound. Shortly after this, a report and minutes from the Bank of England's Monetary Policy Committee meeting are expected to be released. Special attention will be directed to comments regarding inflationary threats, economic growth forecasts, and possible future steps by the central bank. It is important to remember that previous statements from the Bank of England prioritizing the fight against inflation have already caused a significant market reaction, and today's information may either confirm or revise these expectations.

Regarding the intraday strategy, I will primarily rely on implementing scenarios #1 and #2.

Buy Scenarios

• Scenario #1: I plan to buy the pound today when it reaches the entry point around 1.3274 (the green line on the chart), with a target for growth to 1.3320 (the thicker green line on the chart). At around 1.3320, I plan to exit the long positions and immediately open short positions in the opposite direction (anticipating a movement of 30-35 pips in the opposite direction from the level). We can expect the pound to rise today after strong data. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting to rise.
• Scenario #2: I also plan to buy the pound today if the price tests 1.3237 twice in a row while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. An increase can be expected towards the opposite levels of 1.3274 and 1.3320.

Sell Scenarios

• Scenario #1: I plan to sell the pound today after updating the level to 1.3237 (the red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be the 1.3185 level, where I plan to exit the shorts and immediately buy back in the opposite direction (anticipating a 20-25-pip move in the opposite direction from the level). Pressure on the pound may return if the data is poor. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting to decline.
• Scenario #2: I also plan to sell the pound today if the price tests 1.3274 twice in a row while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decrease can be expected towards the opposite levels of 1.3237 and 1.3185.

What's on the Chart:

• The thin green line represents the entry price at which you can buy the trading instrument;
• The thick green line is the assumed price where you can set Take Profit or manually take profit, as further growth above this level is unlikely;
• The thin red line indicates the entry price at which you can sell the trading instrument;
• The thick red line is the assumed price where you can set Take Profit or manually take profit, as further decline below this level is unlikely;
• The MACD indicator. When entering the market, it's important to refer to the overbought and oversold zones.

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.