Trade Analysis and Tips for Trading the British Pound

The test of 1.3452 occurred when the MACD indicator had moved significantly down from the zero mark, which limited the pair's downward potential. For this reason, I did not sell the pound.

The absence of key statistics from the United Kingdom did not support the pound's growth, resulting in a notable correction for the pair. Despite the lack of domestic drivers, the pound remains resilient, benefiting from a favorable domestic backdrop following the recent Bank of England decision. Investors appear to be betting that the Bank of England will avoid a recession and maintain a relatively tight monetary policy. Confidence in the UK economy's resilience is further reinforced by strong employment data and moderate wage growth.

Given the absence of major news in the second half of the day, demand for the pound may return during the U.S. session. Investors are likely to continue taking a cautious approach, using the correction as an opportunity to buy. Moreover, the recent weakening of the U.S. dollar could provide additional support for the pound. Expectations of interest rate cuts by the Federal Reserve are gradually increasing, making the dollar less attractive to investors. In this context, the pound may appear relatively appealing, especially if the Bank of England maintains its hawkish stance.

As for the intraday strategy, I will focus mainly on implementing Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy the pound today upon reaching the entry point around 1.3449 (green line on the chart) with the goal of rising to 1.3480 (thicker green line on the chart). Around 1.3480, I will close long positions and open short positions in the opposite direction, targeting a 30–35 point move in the opposite direction from the level. Today's pound growth is likely only within the framework of the recent bullish market. Important! Before buying, make sure that the MACD indicator is above the zero mark and just starting to rise from it.

Scenario No. 2: I also plan to buy the pound today in the event of two consecutive tests of the 1.3427 level, at a time when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal upward. Growth can be expected toward the opposite levels of 1.3449 and 1.3480.

Sell Signal

Scenario No. 1: I plan to sell the pound today after breaking below the 1.3427 level (red line on the chart), which would lead to a quick decline of the pair. The key target for sellers will be 1.3406, where I will close short positions and immediately open long positions in the opposite direction, aiming for a 20–25 point move upward from the level. Sellers are unlikely to gain significantly more control today. Important! Before selling, make sure that the MACD indicator is below the zero mark and just starting to decline from it.

Scenario No. 2: I also plan to sell the pound today in the event of two consecutive tests of the 1.3449 level, at a time when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal downward. A decline can be expected toward the opposite levels of 1.3427 and 1.3406.

Chart Notes:

• Thin green line – entry price for buying the trading instrument.
• Thick green line – approximate price for placing Take Profit orders or manually taking profit, as further growth above this level is unlikely.
• Thin red line – entry price for selling the trading instrument.
• Thick red line – approximate price for placing Take Profit orders or manually taking profit, as further decline below this level is unlikely.
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important: Beginner Forex traders should make market entry decisions with great caution. Before the release of key fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without stop-loss orders, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes. Remember, successful trading requires a clear trading plan, such as the one outlined above. Spontaneous trading decisions based solely on the current market situation are an inherently losing intraday trading strategy.