Trade Review and Recommendations for Trading the British Pound

The price test of 1.3145 occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. For that reason, I did not buy the pound. The second test of this price shortly thereafter coincided with the MACD being in the overbought zone, which allowed Scenario No. 2 (selling the pound) to play out. As a result, the pair fell by 30 points.

Pressure on the pound increased in the first half of the day. Investors likely shifted their focus to global risks and the overall uncertainty dominating the markets. The lack of positive domestic drivers left the British pound vulnerable to external factors, including expectations of slowing global economic growth and geopolitical tensions. The influence of bond market sentiment also cannot be ruled out. In addition, persistent inflation in the United Kingdom — despite previous measures by the Bank of England — continues to raise concerns, potentially leading to further economic slowdown.

Looking ahead, investors' attention will focus on whether Federal Reserve officials maintain their hawkish tone or show greater readiness to ease policy, especially in light of deteriorating economic data. The market will carefully analyze statements from Waller and Bostic for hints on how the Fed views the future path of interest rates. Any signs of a softer stance or the likelihood of further rate cuts could weaken the U.S. dollar and support the British pound.

As for the intraday strategy, I will mainly rely on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy the pound when the price reaches around 1.3139 (green line on the chart), aiming for growth toward 1.3170 (thicker green line on the chart). Around 1.3170, I plan to close buy positions and open short positions in the opposite direction, expecting a 30–35 point movement from that level. Pound growth today can be expected within the current upward trend for the pair.Important! Before buying, make sure the MACD indicator is above the zero line and just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound if there are two consecutive tests of the 1.3108 price level at a time when the MACD is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upward. Growth toward 1.3139 and 1.3170 can then be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after the price updates the 1.3108 level (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be 1.3078, where I plan to close sell positions and open long positions immediately in the opposite direction, expecting a 20–25 point rebound from that level. Pressure on the pound will return if the Fed maintains a hawkish stance.Important! Before selling, make sure the MACD indicator is below the zero line and just beginning to fall from it.

Scenario No. 2: I also plan to sell the pound in the event of two consecutive tests of the 1.3139 price level when the MACD is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline toward 1.3108 and 1.3078 can then be expected.

Chart Key:

• Thin green line – Entry price level for buying the trading instrument.
• Thick green line – Approximate Take Profit level or area to manually lock in profit, since further growth above this level is unlikely.
• Thin red line – Entry price level for selling the trading instrument.
• Thick red line – Approximate Take Profit level or area to manually lock in profit, since further decline below this level is unlikely.
• MACD indicator – When entering the market, pay attention to overbought and oversold zones.

Important Notice for Beginner Forex Traders

New traders should be extremely cautious when deciding to enter the market. It is best to stay out of the market before major fundamental reports are released to avoid sudden price swings. If you decide to trade during news releases, always use stop-loss orders to minimize potential losses. Without stop-losses, you can quickly lose your entire deposit — especially if you trade large volumes without proper money management.

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