Trade Analysis and Trading Tips for the British Pound

The test of the 1.3369 level occurred when the MACD indicator had just started moving upward from the zero line, confirming a valid entry point for buying the pound. As a result, the pair rose by 10 points, and the move ended there.

The absence of UK economic data predictably led to a small increase in buying interest for the British pound after the strong sell-off seen earlier. At the moment, technical analysis also points to uncertainty: the pound is consolidating after a sharp decline, and nothing more. Therefore, the pair's further direction will depend on U.S. economic data.

The second half of the day promises to be highly eventful for the pound, as the United States will release June inflation data and Federal Reserve Chair Kevin Warsh will deliver his semiannual testimony before Congress. The Consumer Price Index and the core reading excluding food and energy will shape expectations regarding Fed interest rate policy and therefore directly influence the strength of the U.S. dollar. At the same time, the British currency lacks its own drivers, meaning its dynamics will be determined entirely by the U.S. agenda. A persistently high inflation reading and hawkish comments from Warsh could strengthen the dollar and push GBP/USD lower, while weaker data and a cautious tone from the Fed Chair would give the pair a chance to rebound.

Regarding the intraday strategy, the focus will primarily remain on the implementation of Scenario #1 and Scenario #2.

Buy Signal

Scenario #1:

Buying the pound will be considered today if the price reaches the entry level around 1.3390 (green line on the chart), with a target of rising toward 1.3415 (thicker green line on the chart). Around 1.3415, long positions will be closed, and short positions may be opened in the opposite direction, expecting a move of 30–35 points from the level.

A strong rise in the pound today can be expected if the Fed adopts a dovish tone.

Important: Before buying, make sure that the MACD indicator is above the zero line and has only just started rising from it.

Scenario #2:

Buying the pound will also be considered today if there are two consecutive tests of the 1.3371 level while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger an upward market reversal. A rise toward the opposite levels of 1.3390 and 1.3415 can be expected.

Sell Signal

Scenario #1:

Selling the pound will be considered today after a break below the 1.3371 level (red line on the chart), which could lead to a rapid decline in the pair. The key target for sellers will be 1.3340, where short positions will be closed and long positions may be opened in the opposite direction, expecting a reversal move of 20–25 points from the level. Downward pressure on the pound is expected to increase if the Fed takes a more hawkish stance.

Important: Before selling, make sure that the MACD indicator is below the zero line and has only just started declining from it.

Scenario #2:

Selling the pound will also be considered today if there are two consecutive tests of the 1.3390 level while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a downward market reversal. A decline toward the opposite levels of 1.3371 and 1.3340 can be expected.

What Is Shown on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated price level where Take Profit orders can be placed or profits can be manually locked in, as further growth above this level is considered unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated price level where Take Profit orders can be placed or profits can be manually locked in, as further decline below this level is considered unlikely;
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important: Beginner Forex traders should be extremely cautious when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid exposure to sharp exchange rate fluctuations. If trading during news releases, always place stop orders to minimize losses. Without stop orders, it is possible to lose the entire deposit very quickly, especially when proper money management is not used and large trading volumes are involved.

Remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.