Trade Analysis and Advice for Trading the British Pound

The test of the 1.3561 level occurred when the MACD indicator had already moved significantly below the zero line, which in such a bullish market clearly limited the pair's downward potential. For this reason, I did not sell the pound.

Despite news of strong UK GDP growth in February, which came in at an impressive 0.5%, pound buyers seemed to ignore it completely. The data significantly exceeded economists' forecasts, yet, surprisingly, did not trigger the expected positive reaction in the currency market. The lack of any noticeable movement in the pound suggests that the current geopolitical situation—particularly developments in the Middle East—is the key factor influencing investment decisions at the moment.

Ahead, a large batch of US economic data is expected. Initial jobless claims typically serve as an early signal reflecting current labor market dynamics. The Philadelphia Fed Manufacturing Index, in turn, is an important leading indicator tracking activity in the manufacturing sector of one of the country's key industrial regions. Together with data on changes in industrial production, these indicators will help assess how steady (sustainably) the industrial base is recovering and what trends are emerging in goods production.

Special attention will also be paid to a speech by FOMC member John Williams. His comments may provide additional insight into the central bank's view of the current economic situation and the outlook for future Federal Reserve actions.

As for intraday strategy, I will rely more on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy the pound today upon reaching the entry point around 1.3540 (green line on the chart), with a target of 1.3560 (thicker green line). Around 1.3560, I plan to exit long positions and open short positions in the opposite direction (expecting a move of 30–35 points). Further growth of the pound today can be expected within the bullish trend.Important: Before buying, make sure the MACD indicator is above the zero line and just beginning to rise.

Scenario No. 2: I also plan to buy the pound if there are two consecutive tests of the 1.3524 level while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and lead to an upward reversal. Growth toward 1.3540 and 1.3560 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound after a breakout below the 1.3524 level (red line on the chart), which could lead to a rapid decline in the pair. The key target for sellers will be 1.3505, where I plan to exit short positions and open longs in the opposite direction (expecting a 20–25 point move). Pressure on the pound will return today in the case of strong US data.Important: Before selling, make sure the MACD indicator is below the zero line and just beginning to decline.

Scenario No. 2: I also plan to sell the pound if there are two consecutive tests of the 1.3540 level while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and lead to a downward reversal. A decline toward 1.3524 and 1.3505 can be expected.

Chart Explanation

• Thin green line – entry price for buying
• Thick green line – estimated Take Profit level or area to lock in profits, as further growth above this level is unlikely
• Thin red line – entry price for selling
• Thick red line – estimated Take Profit level or area to lock in profits, as further decline below this level is unlikely
• MACD indicator – use overbought and oversold zones when making trading decisions

Important Note for Beginners: Beginner Forex traders should be very cautious when making market entry decisions. It is best to stay out of the market before major fundamental reports are released to avoid sharp price fluctuations. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit—especially if you trade large volumes without proper money management.

Remember, successful trading requires a clear trading plan like the one outlined above. Spontaneous decisions based on current market conditions are a losing strategy for intraday traders.