Trade Analysis and Advice on Trading the British Pound

The price test at 1.3268 occurred at a moment when the MACD indicator had just started moving down from the zero line, confirming the correct entry point for selling the pound. As a result, the pair fell toward the target level of 1.3244.

The morning report on the growth of net personal lending and the U.K. mortgage market provided only temporary support to the pound. Positive economic signals indicating a recovery in consumer demand and the construction sector helped strengthen the national currency; however, pressure on GBP/USD quickly returned, reflecting weak confidence in the British economy amid rising prices.

In the second half of the day, attention will shift to the speeches of Federal Reserve Chair Jerome Powell and his colleague John Williams. The market will closely monitor any hints regarding the future trajectory of monetary policy. Special focus will be given to comments on inflation expectations and the Fed's readiness to raise rates if economic conditions require it. Any signals indicating a hawkish stance will likely strengthen the U.S. dollar and lead to a decline in the British pound.

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

Buy Signal

Scenario #1: I plan to buy pounds today if the entry point reaches around 1.3248 (green line on the chart), with a target of 1.3278 (thicker green line on the chart). Around 1.3278, I plan to exit long positions and open sales in the opposite direction (aiming for a 30–35 point move in the opposite direction from this level). Pound growth today can be expected only after a dovish tone from policymakers. Important! Before buying, make sure the MACD indicator is above zero and has just started rising from that level.

Scenario #2: I also plan to buy pounds today if the price tests 1.3225 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger a reversal upward. Growth toward the opposite levels of 1.3248 and 1.3278 can be expected.

Sell Signal

Scenario #1: I plan to sell pounds today after the price breaks 1.3225 (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 1.3196, where I plan to exit sales and immediately open long positions in the opposite direction (aiming for a 20–25 point move from this level). Pressure on the pound can return at any moment. Important! Before selling, make sure the MACD indicator is below zero and has just started declining from that level.

Scenario #2: I also plan to sell pounds today if the price tests 1.3248 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and trigger a reversal downward. A decline toward the opposite levels of 1.3225 and 1.3196 can be expected.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – approximate price for setting Take Profit or manually locking in profit, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – approximate price for setting Take Profit or manually locking in profit, as further decline below this level is unlikely;
• MACD indicator – when entering the market, pay attention to overbought and oversold zones.

Important: Beginner Forex traders need to be very cautious when making market entries. Before major fundamental reports, it is best to stay out of the market to avoid sudden 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 do not use proper money management and trade with large volumes.

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.