Trade Analysis and Guidance for the British Pound

A price test at 1.3608 in the first half of the day coincided with the MACD indicator having already moved significantly above the zero line, which limited the pair's upward potential. The British pound continued to see active buying despite weak data. Clearly, geopolitical developments are providing stronger support to the pound than economic indicators. Investors likely see the pound as a safe haven amid growing uncertainty across the European continent. The UK's economic stability, despite internal challenges, appears more attractive compared to the Eurozone. Additionally, the Bank of England's relatively slow pace of rate cuts continues to attract buyers to the pound.

The situation may change in the second half of the day, especially with strong U.S. Consumer Confidence data and firm messaging from Fed Chair Jerome Powell about maintaining high interest rates. The market is closely watching every word from Powell, and a hawkish tone could reverse the dollar's recent weakness. Investors are looking for clear signals on the Fed's future strategy. If Powell confirms his willingness to fight inflation even at the cost of slower economic growth, this could support the dollar and put pressure on other currencies, including the pound. Moreover, the release of the U.S. Consumer Confidence Index may be a key driver of further market movement. If the figure exceeds expectations, it will reinforce confidence in the resilience of the U.S. economy and boost the dollar.

As for intraday strategy, I will focus on executing Scenarios #1 and #2.

Buy Signal

Scenario #1:I plan to buy the pound today when the entry point around 1.3630 is reached (thin green line on the chart), targeting a rise to 1.3686 (thick green line on the chart). At 1.3686, I will exit long positions and open shorts in the opposite direction, aiming for a 30–35 point pullback. A bullish pound scenario today depends on weak U.S. data.Important! Before buying, ensure that the MACD indicator is above the zero line and just beginning to rise from it.

Scenario #2:I also plan to buy the pound today if two consecutive tests of the 1.3598 level occur while the MACD is in oversold territory. This would limit the pair's downward potential and trigger a market reversal to the upside. A rise to 1.3630 and 1.3686 can then be expected.

Sell Signal

Scenario #1:I plan to sell the pound after it breaks below 1.3598 (thin red line on the chart), which could lead to a swift decline. The main bearish target will be 1.3539, where I'll exit short positions and open longs in the opposite direction, aiming for a 20–25 point rebound. Sellers are likely to emerge on the back of strong U.S. data.Important! Before selling, ensure that the MACD indicator is below the zero line and just starting to fall.

Scenario #2:I also plan to sell the pound today if two consecutive tests of the 1.3630 level occur while the MACD is in overbought territory. This would limit the pair's upward potential and trigger a downward reversal. A decline toward 1.3598 and 1.3539 may follow.

What's on the Chart:

• Thin green line – Entry price for buying the instrument
• Thick green line – Suggested Take Profit or manual profit-taking level; growth above this level is unlikely
• Thin red line – Entry price for selling the instrument
• Thick red line – Suggested Take Profit or manual profit-taking level; decline below this level is unlikely
• MACD Indicator – Entry decisions should be guided by overbought and oversold zones

Important Note for Beginner Traders:

Beginner Forex traders should exercise extreme caution when deciding to enter the market. It's best to stay out of the market ahead of key fundamental reports to avoid sharp price swings. If you choose to trade during news releases, always place stop-loss orders to minimize losses. Trading without stop-losses can quickly deplete your account, especially if you neglect money management and trade large volumes.

Remember: Successful trading requires a clear and structured trading plan like the one outlined above. Making spontaneous decisions based on the current market situation is a fundamentally losing strategy for intraday traders.