Analysis of Trades and Trading Tips for the British Pound

The first test of the 1.3461 level occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upside potential. For this reason, I did not make the purchase. The second test of 1.3461, while the MACD was in the overbought zone, allowed Scenario #2 for selling to be implemented, resulting in a 40-point drop in the pair.

U.S. housing market data exceeded economists' forecasts, strengthening the dollar and weakening the pound. This unexpected surge in housing activity signals greater resilience in the U.S. economy than previously anticipated. Increases in new home sales, rising housing prices, and lower mortgage rates all create favorable conditions for further dollar strengthening.

At the same time, the British pound is under pressure due to several factors. In the near term, the pound looks relatively weak. If UK economic indicators continue to disappoint and the dollar continues to strengthen, the pound could face further downside. Investors should proceed with caution and closely monitor developments in both the UK and the U.S. before making any decisions.

This morning, the absence of UK macroeconomic data creates a kind of vacuum, one that is quickly filled by other influencing factors. Investors are shifting their attention to global events, U.S. data, and new statements from the Trump administration, all of which could affect the Bank of England's future monetary policy.

For intraday strategy, I will focus primarily on Scenarios #1 and #2.

Buy Scenario

Scenario #1: I plan to buy the pound today at the entry point, around 1.3436 (green line on the chart), targeting a rise to 1.3467 (thicker green line on the chart). Around 1.3467, I will exit long positions and open short positions in the opposite direction, aiming for a 30–35-point move down from the level. A pound rally today can only be expected within the framework of a corrective movement.

Important! Before buying, ensure the MACD indicator is above the zero line and is just starting to rise from it.

Scenario #2: I also plan to buy the pound today in the case of two consecutive tests of the 1.3417 level while the MACD is in oversold territory. This would limit the pair's downside potential and lead to an upward reversal. A rise toward the opposite levels 1.3436 and 1.3467 may be expected.

Sell Scenario

Scenario #1: I plan to sell the pound after 1.3417 (red line on the chart) is updated, which will likely lead to a rapid decline in the pair. The sellers' main target will be 1.3394, where I plan to exit short positions and immediately open long ones in the opposite direction, expecting a 20–25 point rebound. Selling the pound on a rise remains in line with the ongoing bearish trend.

Important! Before selling, ensure the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario #2: I also plan to sell the pound if 1.3436 is tested twice consecutively while the MACD is in overbought territory. This will limit the pair's upside potential and lead to a market reversal to the downside. A decline toward the opposite levels 1.3417 and 1.3394 can be expected.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.