Analysis of trades and trading tips for the British pound

The price test at 1.3412 occurred when the MACD indicator had moved far below the zero mark, limiting the pair's downside potential.

Yesterday's strong US data, along with statements from Federal Reserve officials that the recent data allow them to take a wait-and-see stance on rates and not cut them yet, led to a strengthening of the US dollar. In the near term, the dollar's dynamics will depend on the rhetoric of Fed representatives. The market will closely watch for any signals indicating a change in the course of monetary policy.

Today, in the first half of the day, due to the absence of UK macroeconomic releases, the British currency may continue to lose ground against the US dollar. Traders seeking to avoid risk traditionally choose the dollar as a safe-haven asset, which increases demand for the US currency and may put additional pressure on the British pound. Nevertheless, the speculative component should not be neglected.

Regarding the intraday strategy, I will rely more on implementing scenarios No. 1 and No. 2.

Scenarios for buying

Scenario No. 1: I plan to buy the pound today upon reaching an entry point around 1.3393 (the green line on the chart), with a target to rise to 1.3413 (the thicker green line on the chart). Around 1.3413, I intend to exit long positions and open shorts in the opposite direction (expecting a 30–35-pip move in the opposite direction from that level). Expect growth in the pound today only as part of a correction. Important! Before buying, make sure the MACD indicator is above the zero mark and is only just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today if two consecutive tests of 1.3373 occur while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward reversal. One can expect a rise to the opposite levels 1.3393 and 1.3413.

Scenarios for selling

Scenario No. 1: I plan to sell the pound today after the level 1.3373 is renewed (red line on the chart), which will lead to a rapid decline of the pair. The key target for sellers will be 1.3353, where I intend to exit shorts and immediately open longs in the opposite direction (expecting a 20–25 pip move in the opposite direction from that level). Pound sellers can assert themselves at any moment. Important! Before selling, make sure the MACD indicator is below the zero mark and is only just beginning to fall from it.

Scenario No. 2: I also plan to sell the pound today if two consecutive tests of 1.3393 occur while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a reversal downward. One can expect a decline to the opposite levels 1.3373 and 1.3353.

What is on the chart

• Thin green line — entry price at which you can buy the instrument
• Thick green line — suggested Take Profit price or level at which to manually lock in profit, since further rise above this level is unlikely.
• Thin red line — entry price at which you can sell the instrument
• Thick red line — suggested Take Profit price or level at which to manually lock in profit, since further decline below this level is unlikely.
• MACD indicator — when entering the market, it is important to follow the overbought and oversold zones
• Important notes: Beginner forex traders must be very cautious when deciding to enter the market. It is best to be out of the market before major fundamental reports are released to avoid being caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit quickly, especially if you do not use money management and trade large volumes.
• Remember that successful trading requires a clear trading plan like the one presented above. Spontaneous trading decisions based on current market noise are a losing strategy for the intraday trader.