Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3436 price level occurred when the MACD indicator had already dropped significantly below the zero line, which limited the pair's downside potential. For this reason, I did not sell the pound and skipped the pair's minor downward movement.

Last Friday, strong U.S. durable goods order data was released, supporting the dollar and putting pressure on the GBP/USD pair. Investors, accustomed to mixed data, interpreted this as a sign of resilience in the U.S. economy, which in turn strengthened the dollar's position. The pound came under significant pressure following this news, declining against the U.S. currency. As is well known, demand for durable goods is a key indicator of economic activity. An increase in this figure reflects the growing confidence among consumers and businesses in the future, as well as their willingness to invest.

Today, the market's attention is focused on the CBI retail sales data, and pessimistic results could put additional pressure on the GBP/USD exchange rate. Investors are closely monitoring this report, viewing it as a key indicator of the UK economy's health. Disappointing figures will undoubtedly raise concerns about consumer purchasing power and overall economic activity. In such a scenario, a further decline in the pound against the U.S. dollar seems quite likely. Moreover, weak retail sales data could force the Bank of England to reconsider its monetary policy. The central bank may take steps to ease policy to support economic growth, which in turn may lead to further weakening of the pound.

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

Buy Scenario

Scenario #1: Today, I plan to buy the pound at the 1.3445 entry point (green line on the chart), targeting a rise toward 1.3493 (the thicker green line on the chart). Around 1.3493, I plan to exit the buy positions and open sell positions in the opposite direction (expecting a move of 30–35 pips from the level). Buying the pound today should only be considered after strong data.

Important! Before buying, ensure 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 the 1.3423 price level while the MACD indicator is in the oversold zone. This would limit the pair's downside potential and lead to an upward reversal. A rise toward the opposite levels of 1.3445 and 1.3493 can be expected.

Sell Scenario

Scenario #1: Today, I plan to sell the pound after breaking below the 1.3423 level (red line on the chart), which will likely trigger a sharp decline. The key target for sellers will be 1.3379, where I plan to exit sell positions and immediately open buy positions in the opposite direction (expecting a move of 20–25 pips in the opposite direction). Selling the pound today is justified after weak data.

Important! Before selling, ensure 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 in the event of two consecutive tests of the 1.3445 price level, while the MACD indicator remains in the overbought zone. This would limit the pair's upside potential and potentially lead to a downward reversal. A decline toward the opposite levels of 1.3423 and 1.3379 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.