Trade review and advice on trading the British pound

The price test of 1.3508 occurred when the MACD indicator had already moved far above the zero line, which limited the pair's upward potential.

Selling pressure on the pound did not return yesterday, despite rather restrictive statements from US Federal Reserve officials. The market seemed to ignore hints of a possible more cautious easing of monetary policy in the US, focusing instead on domestic factors supporting the British currency.

Today, in the first half of the day, financial market attention will be on the UK, where key PMI reports for manufacturing, services, and the composite index are expected. These indicators are leading signals that allow assessment of the current state and future prospects of the British economy. Investors and analysts carefully monitor these figures, as they can have a significant impact on currency market dynamics, particularly the pound's exchange rate. The PMI releases are especially important in the current economic context, marked by high inflation, an energy crisis, and uncertainty linked to US trade policy. Positive results reflecting growth in business activity in both manufacturing and services could boost optimism about the UK economy and support the national currency. Stronger data would suggest that the British economy is successfully adapting to new conditions and showing resilience to external shocks. If the figures exceed expectations, the pound sterling can be expected to strengthen against other major currencies.

As for the intraday strategy, I will rely mainly on scenarios #1 and #2.

Buy scenarios

Scenario #1: I plan to buy the pound today around 1.3517 (green line on the chart) with a target at 1.3549 (thicker green line on the chart). At 1.3549, I intend to exit buys and open shorts in the opposite direction, aiming for a 30–35 point move back. A strong rise in the pound should only be expected after strong PMI data. Important! Before buying, make sure the MACD indicator is above the zero line and just beginning to rise from it.

Scenario #2: I also plan to buy the pound today in case of two consecutive tests of 1.3500, at the moment when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal upward. Growth toward 1.3517 and 1.3549 can then be expected.

Sell scenarios

Scenario #1: I plan to sell the pound today after a breakout of 1.3500 (red line on the chart), which would lead to a quick decline in the pair. The key target for sellers will be 1.3474, where I plan to exit shorts and immediately open buys in the opposite direction (expecting a 20–25 point rebound). Pound sellers will become active in case of weak data. Important! Before selling, make sure the MACD indicator is below the zero line and just beginning to decline from it.

Scenario #2: I also plan to sell the pound today in case of two consecutive tests of 1.3517, at the moment when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal downward. A decline toward 1.3500 and 1.3474 can then be expected.

What's on the chart:

• Thin green line – entry price for buying the instrument.
• Thick green line – estimated price for setting Take Profit or manually fixing profits, since growth above this level is unlikely.
• Thin red line – entry price for selling the instrument.
• Thick red line – estimated price for setting Take Profit or manually fixing profits, since decline below this level is unlikely.
• MACD indicator – when entering the market, it is important to use overbought and oversold zones.

Important: Beginner Forex traders must make entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you may very quickly lose your entire deposit, especially if you don't use money management and trade large volumes.

And remember: for successful trading, you must have a clear trading plan, like the one I presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.