Trade Review and Tips for Trading the British Pound

The price test at 1.3517 occurred when the MACD indicator had just begun moving downward from the zero mark, confirming the correct entry point for selling the pound. As a result, the pair fell by more than 100 points.

In the second half of the day, everything will depend on the data for the manufacturing PMI and the ISM Manufacturing Index. Growth in these indicators will only increase pressure on GBP/USD. A rise in the indices, especially ISM, could be interpreted by the market as a signal of stronger U.S. economic growth, which would strengthen the dollar. Stronger-than-expected data would also give the Federal Reserve additional considerations for future policy, making the dollar more attractive.

Still, unexpected scenarios, like the morning sell-off in GBP/USD, should not be ruled out. If U.S. data turn out weaker than expected, the pressure on GBP/USD could ease. Nevertheless, under current conditions, rising U.S. business activity indexes seem the most likely factor to push the pair lower.

As for intraday strategy, I will focus 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 1.3403 (green line on the chart), targeting 1.3441 (thicker green line on the chart). Around 1.3441, I will exit long positions and open shorts 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 just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today if there are two consecutive tests of the 1.3364 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 can be expected toward the opposite levels of 1.3403 and 1.3441.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after a break of the 1.3364 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 1.3313, where I will exit shorts and immediately open longs in the opposite direction, aiming for a 20–25 point move from the level. Strong data would trigger another decline in the pair. Important! Before selling, make sure the MACD indicator is below the zero mark and just beginning to fall from it.

Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of the 1.3403 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 can be expected toward the opposite levels of 1.3364 and 1.3313.

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, as 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, as 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 important fundamental reports are released, 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.

And remember: successful trading requires a clear trading plan, like the one presented above. Spontaneous decisions based on current market conditions are an inherently losing strategy for intraday traders.