Trade review and recommendations for trading the British pound

The test of 1.3350 coincided with a moment when the MACD indicator had already moved significantly below the zero line, which limited the downward potential of the pair. For this reason, I did not sell the pound and stayed out of trades.

In the second half of the day, markets will be primarily driven by U.S. data on the core Personal Consumption Expenditures (PCE) index and changes in household spending. These indicators are key measures of inflationary pressure and consumer demand, making them critically important for assessing the current state of the U.S. economy. Increased attention to the PCE index is due to the fact that the Fed uses it as the main indicator of inflation. If the actual PCE reading exceeds expectations, this may indicate persistent inflation, which could push the Fed toward a more restrictive policy. Changes in household spending, in turn, reflect the state of consumer demand, which is one of the main drivers of U.S. economic growth. Rising household spending signals consumer confidence in the future and their willingness to spend, which benefits the economy. However, too rapid a rise in spending may also contribute to stronger inflationary pressure.

Together, the PCE index and household spending data will provide important insights for assessing the trajectory of the U.S. economy and the Fed's future monetary policy. Strong data will support dollar growth against the British pound.

As for intraday strategy, I will rely more on implementing scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today at the entry point near 1.3464 (green line on the chart) with a target at 1.3494 (thicker green line on the chart). Around 1.3494, I will exit purchases and open sales in the opposite direction (expecting a 30–35 point move back from that level). A strong rise in the pound can be expected after weak U.S. 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 if there are two consecutive tests of 1.3441, at a time when the MACD indicator is in oversold territory. This will limit the downward potential of the pair and lead to a reversal upward. Growth can then be expected toward the opposite levels of 1.3464 and 1.3494.

Sell Signal

Scenario #1: I plan to sell the pound today after the price breaks below 1.3441 (red line on the chart), which will quickly push the pair lower. The key target for sellers will be 1.3407, where I will exit sales and immediately open purchases in the opposite direction (expecting a 20–25 point move back from that level). The pound may fall in the second half of the day if the U.S. data is strong. 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 if there are two consecutive tests of 1.3464, at a time when the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a reversal downward. A decline can then be expected toward the opposite levels of 1.3441 and 1.3407.

Chart Details:

• Thin green line – entry price for buying the instrument;
• Thick green line – projected level for placing Take Profit orders or manually fixing profit, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – projected level for placing Take Profit orders or manually fixing profit, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to follow overbought and oversold zones.

Important: Beginner Forex traders must be very cautious when deciding on market entry. Before major fundamental reports are released, it is best to stay out of the market to avoid sudden price swings. If you choose to trade during news releases, always place stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember, for successful trading it is essential to have a clear trading plan, like the one I presented above. Spontaneous trading decisions based solely on the current market situation are from the outset a losing strategy for intraday traders.