Analysis of Trades and Trading Advice for the British Pound

The price test of 1.3500 occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. For this reason, I did not sell the pound.

In the second half of the day, US economic data will determine the pound's direction, as there are no significant domestic catalysts for the British currency, while the market itself is moving slowly due to a lack of drivers. The focus will be on US existing home sales and the NFIB Small Business Optimism Index. The first indicator reflects demand in the interest-rate-sensitive housing sector, while the second measures sentiment among small businesses. Through their implications for the economy, both releases affect expectations regarding Fed policy. Strong data could further strengthen the dollar and put pressure on GBP/USD, while a weak result would support the British currency by weakening the US dollar. It is worth remembering that the pound's upward trend has not yet been broken, so there are fairly good chances of another upward move in the pair.

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

Buy Signal

Scenario #1: I plan to buy the pound today when the entry point is reached around 1.3512 (the green line on the chart), with a target of 1.3545 (the thicker green line on the chart). Around 1.3545, I will close the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. The pound can be expected to rise today as the trend continues. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario #2: I also plan to buy the pound today if the price tests 1.3496 twice consecutively while the MACD indicator is in the oversold area. This would limit the pair's downward potential and lead to a reversal to the upside. A rise toward the opposite levels of 1.3512 and 1.3545 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after the 1.3496 level is broken (the red line on the chart), which could lead to a rapid decline in the pair. The key target for sellers will be 1.3468, where I will close the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Strong downward pressure on the pound will return if US data are strong. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario #2: I also plan to sell the pound today if the price tests 1.3512 twice consecutively while the MACD indicator is in the overbought area. This would limit the pair's upward potential and lead to a reversal to the downside. A decline toward the opposite levels of 1.3496 and 1.3468 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 expected 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 expected 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 overbought and oversold areas into account.

Important. Beginner Forex traders should be extremely cautious 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 exchange-rate fluctuations. If you decide to trade during news releases, always use stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade with large position sizes.

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 fundamentally a losing strategy for an intraday trader.