Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3331 level occurred when the MACD indicator had just started moving downward from the zero mark, confirming a proper entry point for selling the pound and resulting in a drop of more than 25 pips.

The GBP/USD pair has come under pressure several times amid strong U.S. data, but a major sell-off has yet to materialize. This suggests a certain degree of resilience in the British currency despite external negative factors stemming from stronger U.S. economic indicators. In addition, technical analysis plays a role, as support and resistance levels form the boundaries of a sideways channel in which the pair is currently moving.

Today, there are no macroeconomic reports from the UK, so the pound may have a chance to correct in the first half of the day. The absence of domestic economic data often creates an opportunity for a technical correction, especially after strong moves driven by external factors. However, it's important to remember that this correction is likely to be short-term and limited. Fundamental factors such as the state of the UK economy, inflation, and Bank of England policy will continue to play a decisive role in the pound's long-term outlook.

For intraday strategy, I will focus primarily on Scenarios #1 and #2.

Buy Scenario

Scenario #1: Today, I plan to buy the pound upon reaching the entry point around 1.3367 (green line on the chart), targeting a rise to 1.3406 (thicker green line on the chart). Around 1.3406, I plan to exit long positions and open a short position in the opposite direction, aiming for a 30–35 pip reversal from the level. Buying the pound today can be considered as part of a corrective move.

Important! Before buying, ensure the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario #2: I also plan to buy the pound today if the 1.3339 level is tested twice in a row while the MACD is in oversold territory. This would limit the downside potential of the pair and trigger a reversal upward. A rise to the opposing levels of 1.3367 and 1.3406 can be expected.

Sell Scenario

Scenario #1: I plan to sell the pound today after an update of the 1.3339 level (red line on the chart), which could lead to a quick drop in the pair. The key target for sellers will be 1.3288, where I plan to exit short positions and immediately open a long position in the opposite direction, targeting a 20–25 pip rebound from the level. Selling the pound today fits with the continuation of the bearish trend.

Important! Before selling, ensure the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario #2: I also plan to sell the pound today if the 1.3367 level is tested twice in a row while the MACD is in the overbought zone. This would limit the pair's upside potential and lead to a downward market reversal. A decline to the opposing levels of 1.3339 and 1.3288 can be expected.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.