Trade Analysis and Tips for the British Pound

The price test at 1.3445 coincided with the moment when the MACD indicator had just started moving downward from the zero mark, which confirmed the correct entry point for selling the pound. However, little could be gained from this trade, as strong U.K. data spoiled the bears' sentiment.

The U.K. services PMI rose in August, beating economists' forecasts. This growth was driven by an increase in new orders, optimism about the economic outlook, and easing inflationary pressures. At the same time, the manufacturing PMI remained below the 50 mark, indicating continued contraction in that sector. Manufacturers are facing challenges related to global uncertainty, supply chain disruptions, and weaker export demand. Despite mixed trends across sectors, overall economic growth in the U.K. remains subdued.

In the second half of the day, U.S. manufacturing PMI and services PMI data will be released, along with the composite PMI report. Strong data may quickly put pressure back on the pound, as it would strengthen expectations of the Federal Reserve maintaining its pause. Investors will be closely watching these indicators to assess the condition of the U.S. economy and the potential impact on the pound. If the data exceed expectations, it may point to strong U.S. economic growth, which could increase demand for the dollar and reduce interest in the pound. On the other hand, if the data come in weaker, this may suggest a slowdown in U.S. economic growth, potentially reducing demand for the dollar and boosting interest in the pound.

As for intraday strategy, I will be relying mainly on the implementation of Scenarios 1 and 2.

Buy Signal

Scenario 1: Today, I plan to buy the pound at the entry point around 1.3478 (green line on the chart) with a target of 1.3506 (thicker green line on the chart). At around 1.3506 I will exit long positions and open short positions in the opposite direction (expecting a 30–35-point move downward from the level). A strong rally in the pound today is only possible if U.S. data turn out weak. Important! Before buying, make sure the MACD indicator is above the zero mark and has just started rising from it.

Scenario 2: I also plan to buy the pound today in case of two consecutive tests of the 1.3457 level at a time when the MACD indicator is in the oversold area. This will limit the pair's downward potential and trigger a reversal upward. Growth toward the opposite levels of 1.3478 and 1.3506 can be expected.

Sell Signal

Scenario 1: Today, I plan to sell the pound after the 1.3457 level is updated (red line on the chart), which would lead to a quick decline in the pair. The key target for sellers will be 1.3426, where I will exit short positions and immediately open long positions in the opposite direction (expecting a 20–25-point rebound upward from the level). Sellers may push the pound lower, but this requires strong U.S. data. Important! Before selling, make sure the MACD indicator is below the zero mark and has just started falling from it.

Scenario 2: I also plan to sell the pound today in case of two consecutive tests of the 1.3478 level at a time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and trigger a reversal downward. A decline toward the opposite levels of 1.3457 and 1.3426 can be expected.

Chart Notes:

• Thin green line – entry price for buying the instrument;
• Thick green line – suggested price for setting Take Profit or fixing profit manually, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – suggested price for setting Take Profit or fixing profit manually, 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 make trading decisions with great caution. Before the release of important 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 place stop orders to minimize losses. Without stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember: successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous decisions based on the current market situation is an inherently losing strategy for intraday traders.