Trade Review and Tips for Trading the British Pound

The price test at 1.3527 occurred when the MACD indicator had already moved significantly above the zero mark, which limited the pair's upward potential. For this reason, I did not buy the pound.

Weak data on manufacturing activity in the UK prevented the pound from showing strong growth. The published PMI indices came in well below analysts' expectations, signaling a slowdown in the British economy and heightening concerns about a possible recession. Combined with persistently high inflation, these figures put pressure on the British currency.

Technical analysis shows that the pound is trading within a sideways channel, which is proving difficult to break. Considering that the U.S. has a holiday in the second half of the day, it will be even harder. However, this does not mean complete calm. Rather, a more moderate, consolidating dynamic can be expected. The absence of U.S. market participants typically leads to lower liquidity and, consequently, greater sensitivity to local news and microeconomic factors.

As for the intraday strategy, I will rely more on implementing scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy the pound at the entry point around 1.3536 (green line on the chart) with a target of 1.3559 (thicker green line on the chart). Around 1.3559, I will close long positions and open short positions in the opposite direction, aiming for a 30–35 point move from the level. A strong rise in the pound is unlikely today. Important! Before buying, make sure the MACD indicator is above the zero mark and is only just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today in the event of two consecutive tests of the 1.3514 price level, at the moment when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 1.3536 and 1.3559 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after a break of the 1.3514 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 1.3490, where I will close short positions and immediately open long positions in the opposite direction, aiming for a 20–25 point move from the level. With today's holiday, sellers could push the pound down at any moment. Important! Before selling, make sure the MACD indicator is below the zero mark and is only just beginning to fall from it.

Scenario No. 2: I also plan to sell the pound today in the event of two consecutive tests of the 1.3536 price level, at the moment when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.3514 and 1.3490 can be expected.

What is on the chart:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – indicative price for placing Take Profit or manually fixing profits, since further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – indicative price for placing Take Profit or manually fixing profits, since further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important. Beginner traders in the Forex market should be very cautious when making entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you choose to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use money management and trade large volumes.

Remember that successful trading requires a clear trading plan, like the one presented above. Spontaneous decisions based on the current market situation are an inherently losing strategy for an intraday trader.