Review of Trades and Trading Advice for the British Pound

The test of 1.3484 occurred when the MACD indicator had just begun moving down from the zero line, confirming that the entry point for a short position was appropriate. As a result, the pair declined by 12 points.

UK GDP grew by 0.4% in the second quarter, exactly in line with the forecast, but slowing from 0.6% in the first quarter. Year-on-year, the economy grew by 1.2%, to which the pound showed no reaction. GDP reflects the pace of economic growth and serves as a key indicator of economic health; however, the composition of the report was less convincing than the headline figure. Services accounted for the entire increase, rising by 0.5%. For the Bank of England, this becomes a less obvious argument in favor of a pause, as slower growth and weak industrial activity do not support tighter monetary policy.

In the second half of the day, the U.S. agenda will determine the pound's direction, as there are no significant domestic catalysts for the British currency today. The focus will be on the U.S. Producer Price Index and its core reading, excluding food and energy, as well as weekly initial jobless claims. The Producer Price Index reflects price pressures at the production level and serves as a leading indicator of inflation, which in turn affects expectations for the Federal Reserve's interest rate policy and the strength of the dollar. Under these circumstances, the pound becomes dependent on external factors. If inflation rises, demand for the dollar will quickly return, potentially weighing on GBP/USD, while weak data would support the British currency through a weaker U.S. dollar.

As for the intraday strategy, I will rely more heavily on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound when the entry point is reached around 1.3506 (the green line on the chart), with a target of 1.3526 (the thicker green line on the chart). Around 1.3526, I will close the long position and open a short position in the opposite direction, targeting a move of 30–35 points from the level. The pound can be expected to continue rising today only if U.S. data are weak. Important! Before buying, make sure that the MACD indicator is above the zero line and has just begun rising from it.

Scenario #2: Today, I also plan to buy the pound if the price tests 1.3486 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward reversal. A rise toward the opposite levels of 1.3506 and 1.3526 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell the pound after the 1.3486 level is broken (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 1.3461, where I will close the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points from the level. Strong downward pressure on the pound will return if U.S. data are strong. Important! Before selling, make sure that the MACD indicator is below the zero line and has just begun declining from it.

Scenario #2: Today, I also plan to sell the pound if the price tests 1.3506 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.3486 and 1.3461 can be expected.

What Is Shown on the Chart

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated price at which Take Profit can be placed or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated price at which Take Profit can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold zones into account.

Important. Beginner Forex traders should exercise great caution when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during a news release, always place stop orders to minimize losses. Without stop orders, you can lose your entire trading account very quickly, especially if you do not use proper money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.