Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3498 price level occurred when the MACD indicator had already moved down significantly from the zero line, which limited the pair's downside potential. For this reason, I did not sell the pound.

Recent revisions have shown improved US economic growth figures for the second quarter. GDP increased by 3.3%, exceeding the initial estimate of 3.0%. However, contrary to expectations, the dollar did not react to this news and continued to weaken against the pound.

Despite the improved macroeconomic outlook, the decisive factor for the exchange rate remains the prospect of monetary policy easing. Investors evidently are betting that the Federal Reserve will be more inclined to lower interest rates, thereby putting pressure on the dollar. This scenario highlights how priorities have shifted in financial markets. In the past, strong economic data would usually support the dollar, as it signaled the possibility of rate hikes. However, in the current environment, with inflation gradually declining, the Fed may be more likely to take measures aimed at stimulating economic growth, even if this leads to a weaker national currency.

Today, there is no UK data available, so pound sellers may have a chance for a larger correction in the pair. The absence of significant economic releases creates a unique situation in which technical factors and market sentiment have a predominant influence on the exchange rate. In such circumstances, corrective moves—especially after there was no reaction yesterday to strong US economic data—become more likely.

Selling activity in the pound may be driven by profit-taking following the recent strengthening of the British currency at the end of the week, creating additional downward pressure. Moreover, speculative players, seeing no new catalysts for growth, could take the opportunity to go short, betting on a temporary weakening of the pound.

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

Buy Scenario

• Scenario #1: Today, I plan to buy the pound if the entry point at around 1.3509 (indicated by the green line on the chart) is reached, targeting a rise to 1.3540 (the thicker green line on the chart). Around 1.3540, I plan to exit the buys and open a sell position in the opposite direction (aiming for a 30–35 pip move in the opposite direction from that level). Counting on the pound's rise today makes sense only within the context of yesterday's upward trend. Important! Before buying, ensure the MACD indicator is above the zero line and is just beginning to rise from it.
• Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.3489 price level when the MACD is in the oversold area. This will limit the pair's downside potential and lead to an upward reversal. Growth can be expected toward the 1.3508 and 1.3540 levels.

Sell Scenario

• Scenario #1: Today, I plan to sell the pound after the 1.3489 level (red line on the chart) is broken, which should trigger a rapid decline in the pair. The key target for sellers will be 1.3458, where I plan to exit the sales and immediately open a buy position in the opposite direction (expecting a 20–25 pip move in the opposite direction from that level). Today, sellers may exhibit significantly more activity than they did yesterday. Important! Before selling, ensure the MACD is below the zero line and is just beginning to decline from it.
• Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.3509 level while the MACD is in the overbought area. This will limit the upward potential for the pair and lead to a reversal downward. A decline can be expected toward the 1.3489 and 1.3458 levels.

What's on the Chart:

Thin green line – entry price at which the instrument can be bought.

Thick green line – suggested price for taking profit or manually securing profits, as further growth above this level is unlikely.

Thin red line – entry price at which the instrument can be sold.

Thick red line – suggested price for taking profit or manually securing profits, as further decline below this level is unlikely.

MACD indicator: When entering the market, it is important to refer to overbought and oversold areas.

Important. Beginner forex traders should exercise extreme caution when making entry decisions. Before important fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during the release of news, always use stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes. And remember: for successful trading, you need a clear trading plan, as I described above. Making spontaneous trading decisions based on the current market situation from moment to moment is a losing strategy for an intraday trader.