Trade review and tips for trading the pound

The test of 1.3427 occurred when the MACD indicator had already moved significantly down from the zero line, which limited the downward potential of the pair. For this reason, I did not sell the pound. The second test of 1.3427 coincided with the MACD being in the overbought zone, which allowed Scenario #2 for buying the pound to play out, resulting in growth of more than 20 points.

In the second half of the day, weak U.S. pending home sales data is unlikely to pressure the dollar, but dovish comments from Fed officials Christopher Waller and John Williams are another matter. An unexpected drop in sales would be an unpleasant surprise, raising doubts about the strength of the housing sector recovery. Immediately after the release of this data, Waller and Williams are scheduled to speak. Known for their cautious stance on inflation, this time they may deliver softer comments, which would further weaken the dollar.

As for intraday strategy, I will rely mainly on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today at the entry point around 1.3448 (green line on the chart) with a target at 1.3480 (thicker green line on the chart). Around 1.3480, I will close purchases and open sales in the opposite direction (expecting a move of 30–35 points in the opposite direction from the level). A strong pound rally can be expected after weak data. Important! Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2: I also plan to buy the pound today in the event of two consecutive tests of the 1.3422 level while the MACD indicator is in oversold territory. This will limit the downward potential of the pair and lead to a reversal upward. Growth toward the opposite levels of 1.3448 and 1.3480 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after breaking the 1.3422 level (red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be 1.3396, where I will close sales and immediately open purchases in the opposite direction (expecting a move of 20–25 points upward from the level). The pound could fall sharply in the second half of the day after strong data. Important! Before selling, make sure the MACD indicator is below the zero line and just starting to decline from it.

Scenario #2: I also plan to sell the pound today in the event of two consecutive tests of the 1.3448 level while the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a reversal downward. A decline toward 1.3422 and 1.3396 can be expected.

Chart Notes:

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

Important: Beginner Forex traders must make entry decisions with extreme caution. Before the release of major 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 place stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you neglect money management and trade with large volumes.

And remember, successful trading requires having a clear trading plan, like the one outlined above. Spontaneous decisions based on the current market situation are an inherently losing strategy for intraday traders.