Analysis of Trades and Tips for Trading the British Pound

The test of the price at 1.3617 occurred when the MACD indicator was starting to move upward from the zero mark, confirming the correct entry point for buying the pound. As a result, the pair rose by more than 30 pips.

The pound rose against the dollar after Stephen Miran, a member of the Board of Governors of the US Federal Reserve, said yesterday that US interest rates should be lower. His words triggered a wave of speculation in currency markets, where traders began actively selling dollars, anticipating a softening of the Fed's monetary policy. The British pound, on the other hand, strengthened. Some traders interpreted Miran's comments as a signal for an imminent rate cut, which weakened the dollar's position. However, it is apparent that Miran's statements do not fully reflect the Fed's overall stance on the slowing US economy and the need for rate cuts. Many policymakers hold a more restrictive position.

Today, there are no important economic data releases in the first half of the day, so the British pound has every chance to continue strengthening against the US dollar. Typically, during quiet periods on the news front, the forex market continues to follow established movements, and the current movement of GBP/USD looks quite promising.

Regarding the intraday strategy, I will primarily rely on the realization of Scenarios #1 and #2.

Buy Scenarios

• Scenario #1: I plan to buy the pound today upon reaching the entry point around 1.3680 (green line on the chart), targeting a move to 1.3706 (thicker green line on the chart). Near 1.3706, I plan to exit my long positions and open shorts in the opposite direction (anticipating a 30-35-pip move in the opposite direction from the level). One can expect the pound to grow today within the observed trend. Important! Before buying, ensure that the MACD indicator is above the zero mark and just starting to rise from it.
• Scenario #2: I also plan to buy the pound today if the price tests 1.3660 twice in a row while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. An increase towards the opposing levels of 1.3680 and 1.3706 can be expected.

Sell Scenarios

• Scenario #1: I plan to sell the pound today after the level at 1.3660 (red line on the chart) is reached, which will trigger a rapid decline in the pair. The key target for sellers will be the level of 1.3634, where I intend to exit the market and also open immediate long positions in the opposite direction (anticipating a movement of 20-25 pips in the opposite direction from the level). Pound sellers will come into play if there is a failed breakout above the daily high. Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting to decline from it.
• Scenario #2: I also plan to sell the pound today if the price tests 1.3680 twice in a row while the MACD indicator is in the overbought zone. This will limit the upward potential of the pair and lead to a downward market reversal. A decline to the opposing levels of 1.3660 and 1.3634 can be expected.

What's on the Chart:

The thin green line represents the entry price at which one can buy the trading instrument;

The thick green line represents the approximate price where one can set Take Profit or secure profits, as further growth above this level is unlikely;

The thin red line represents the entry price at which one can sell the trading instrument;

The thick red line represents the approximate price where one can set Take Profit or secure profits, as further decline below this level is unlikely;

The MACD indicator: when entering the market, it is important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market should be very careful when making entry decisions. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.