Trade Analysis and Tips for Trading the British Pound

The test of the 1.3472 price level occurred at a moment when the MACD indicator was just beginning to move upward from the zero line, which confirmed a valid entry point for buying the pound. As a result, the pair rose by only 12 points.

Ahead of key macroeconomic data releases, the market has paused in anticipation. The U.S. University of Michigan Consumer Sentiment Index, along with inflation expectations data, will serve as a litmus test for assessing the state of the U.S. economy and, consequently, a determining factor for the future direction of the dollar. Positive consumer sentiment, reflecting confidence in future economic conditions, may signal stronger consumer activity. At the same time, inflation expectations are equally important. Moderate growth in inflation expectations, within the Federal Reserve's target range, may be interpreted as a sign of a healthy economy.

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

Buy Signal

Scenario No. 1: I plan to buy the pound today upon reaching the entry point around 1.3492 (green line on the chart), with a target at 1.3514 (thicker green line). At 1.3514, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move back from the level). Growth in the pound today can only be expected after weak U.S. data.Important! Before buying, make sure the MACD indicator is above the zero line and just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound if there are two consecutive tests of the 1.3477 level while the MACD indicator is in the oversold zone. This would limit downward potential and trigger a reversal upward. A move toward 1.3492 and 1.3514 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound after a break below the 1.3477 level (red line on the chart), which should lead to a quick decline. The key target for sellers is 1.3456, where I will exit shorts and immediately open longs in the opposite direction (expecting a 20–25 point move back). Pressure on the pound may return today if tensions between the U.S. and Iran escalate.

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 1.3492 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 1.3477 and 1.3456 can then be expected.

Chart Notes

• Thin green line – entry price for buying the instrument
• Thick green line – estimated Take Profit level or manual profit-taking area, as further upside above this level is unlikely
• Thin red line – entry price for selling the instrument
• Thick red line – estimated Take Profit level or manual profit-taking area, as further downside below this level is unlikely
• MACD indicator – when entering trades, pay attention to overbought and oversold zones

Important: Beginner Forex traders should be very cautious when making trading decisions. Before the release of major fundamental reports, it is best to stay out of the market to avoid sharp volatility. If you choose to trade during news events, always use stop-loss orders to minimize losses. Without stop-losses, you may quickly lose your entire deposit—especially if you do not use proper money management and trade large volumes.

And remember, successful trading requires a clear trading plan like the one outlined above. Making spontaneous trading decisions based on current market conditions is a losing strategy for intraday traders from the outset.