Analysis of Trades and Trading Tips for the British Pound

The price test at 1.3424 coincided with the MACD indicator moving above the zero mark, confirming the correct entry point for buying pounds. As a result, the pair rose by 40 pips.

Last Friday, the US currency weakened significantly against the pound after news emerged of an agreement between US and Iranian representatives on the preliminary terms for a peaceful resolution. However, despite the initial positive signals, markets preferred a cautious wait-and-see approach. The main reason for this cautious attitude was the lack of official approval and, more importantly, the personal endorsement from Donald Trump.

Today promises to be eventful for the UK economy, and the PMI index for the manufacturing sector is set to be a key indicator. Recently, we have observed a steady improvement in manufacturing metrics, which supports optimistic sentiment in the market. It is expected that the May data will confirm this trend, demonstrating further growth in business activity and, consequently, strengthening the position of the British pound.

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

Buying Scenarios:

Scenario #1: I plan to buy pounds today upon reaching the entry point around 1.3475 (green line on the chart), targeting a move to 1.3509 (thicker green line on the chart). Around 1.3509, I intend to exit my long positions and open short positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). A strong rise in the pound can only be expected after a breakthrough in the peace agreement. Important! Before buying, make sure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy pounds today in the event of two consecutive tests of the price 1.3453 when the MACD indicator is in oversold territory. This will limit the downward potential of the pair and lead to an upward market reversal. We can expect a rise to the opposite levels 1.3475 and 1.3509.

Selling Scenarios:

Scenario #1: I plan to sell pounds today after updating the level at 1.3453 (red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be the level 1.3412, where I intend to exit my shorts and immediately open longs in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Pressure on the pound will return in case of weak data. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just beginning its descent from it.

Scenario #2: I also plan to sell pounds today if the price 1.3475 is tested twice consecutively while the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a market reversal downward. Expect a decline to opposite levels of 1.3453 and 1.3412.

What's on the Chart:

Thin green line – entry price for buying the trading instrument;

Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;

Thin red line – entry price for selling the trading instrument;

Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;

MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.

And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.