Trade Review and Tips for Trading the British Pound

The price test at 1.3391 coincided with the MACD indicator just beginning to move downward from the zero mark, confirming the correct entry point for selling the pound. However, the situation did not lead to a significant sell-off of the pair.

Yesterday's weak UK labor market data, despite its negative tone, did not exert significant pressure on the British pound, maintaining its chances of recovery against the dollar. The report showed a slowdown in employment growth, a slight increase in jobless claims, and a rise in the UK's overall unemployment rate.

Today, global financial markets will also focus on the UK, where key macroeconomic indicators are set to be released, capable of significantly influencing the British pound's exchange rate and the overall economic agenda. The main event will be the publication of consumer price index data, which is a key inflation indicator. Analysts expect this figure to increase from the previous month, which might signal to the Bank of England about future interest rate policy. If inflation indicators come in above forecasts, this could bolster the case for further monetary policy tightening. Conversely, lower figures could provide the central bank with grounds for a more cautious approach or even consideration of rate cuts in the longer term.

Regarding the intraday strategy, I will focus on implementing Scenarios No. 1 and No. 2.

Buying Scenarios

Scenario No. 1: I plan to buy the pound today upon reaching an entry point around 1.3402 (green line on the chart), with a target for growth to level 1.3431 (thicker green line on the chart). At level 1.3431, I intend to exit the long positions and sell back in anticipation of a 30-35-pip move from the entry point. Strong pound growth can only be expected with good data. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today if the price tests 1.3382 twice in a row, when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. One can expect growth toward the opposite levels of 1.3402 and 1.3431.

Selling Scenarios

Scenario No. 1: I plan to sell the pound today after the 1.3382 level is updated (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be level 1.3351, where I intend to exit the short positions 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 at any moment. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline from that level.

Scenario No. 2: I also plan to sell the pound today if two consecutive tests of 1.3402 occur while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. One can expect a decline toward the opposite levels of 1.3382 and 1.3351.

What is on the Chart:

• The thin green line – entry price at which the trading instrument can be bought;
• The thick green line – approximate price where take profit can be set or to realize profit, as further growth above this level is unlikely;
• The thin red line – entry price at which the trading instrument can be sold;
• The thick red line – approximate price where take profit can be set or to realize profit, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner traders in the Forex market need to make entry decisions very cautiously. It is best to stay out of the market before important fundamental reports to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making impulsive trading decisions based on the current market situation is fundamentally a losing strategy for an intraday trader.