Trade Review and Tips for Trading the British Pound

The price test of 1.3636 occurred when the MACD indicator had already moved far below the zero line, which limited the pair's downward potential. For this reason, I did not sell the pound.

Today, the pound continued to decline without any serious fundamental reasons. Political instability is certainly putting pressure on the national currency, generating uncertainty about future economic policy and the investment climate. Investors typically avoid risks associated with political turmoil, leading to capital outflows and a weakening of the pound. In the short term, further movement of the pound will depend on developments in the UK's political situation, as well as on upcoming economic data.

Figures on the Halifax House Price Index are expected. While this may seem like a secondary indicator, it can help provide insight into the country's current economic condition. In a context of heightened political and economic instability, even minor changes in housing prices may be interpreted by market participants as reflections of consumer sentiment and the overall resilience of the economy. However, the Halifax index has relatively little direct impact on the exchange rate. Far more important to traders are key macroeconomic indicators such as GDP, inflation, employment levels, and decisions by the Bank of England's Monetary Policy Committee. Nevertheless, as part of a broader economic assessment, the house price index can serve as an additional reference point, especially during periods of heightened volatility and uncertainty.

As for intraday strategy, I will primarily rely on the implementation of Scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy the pound today if the entry point of around 1.3635 (green line on the chart) is reached, targeting a rise toward 1.3671 (thicker green line on the chart). Near 1.3671, I plan to exit long positions and open short trades in the opposite direction (expecting a move of 30–35 points in the opposite direction). Buying the pound today is only justified after strong economic 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 the price tests the 1.3608 level twice in a row while the MACD indicator is in the oversold area. This would limit the pair's downward potential and lead to a reversal to the upside. Growth toward the opposite levels of 1.3635 and 1.3671 can be expected.

Sell Scenarios

Scenario #1: I plan to sell the pound today after the price breaks below the 1.3608 level (red line on the chart), which would trigger a quick drop in the pair. The key target for sellers is the 1.3569 level, where I plan to exit short positions and open long positions immediately in the opposite direction (expecting a 20–25 point rebound). Selling the pound will make sense if weak data is released.Important! Before selling, make sure the MACD indicator is below the zero line and just beginning to fall from it.

Scenario #2: I also plan to sell the pound today if the price tests the 1.3635 level twice in a row while the MACD indicator is in the overbought area. This would limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.3608 and 1.3569 can be expected.

Chart Key:

• Thin green line – entry price for buying the trading instrument.
• Thick green line – projected price level where Take Profit can be set or profits manually secured, as further growth above this level is unlikely.
• Thin red line – entry price for selling the trading instrument.
• Thick red line – projected price level where Take Profit can be set or profits manually secured, as further decline below this level is unlikely.
• MACD Indicator – overbought and oversold zones are important for determining market entry points.

Important: Beginner traders in the Forex market should be extremely cautious when deciding to enter a trade. Before the release of major fundamental reports, it's best to stay out of the market to avoid sharp price swings. If you choose to trade during news releases, always place stop-loss orders to minimize losses. Without stop-losses, you could quickly lose your entire deposit—especially if you're not using money management and are trading large volumes.

And remember: to trade successfully, you need a clear trading plan—like the one I've outlined above. Making spontaneous trading decisions based on the current market situation is a losing strategy for intraday traders.