Trade Analysis and Tips for Trading the British Pound

The test of the 1.3423 level occurred when the MACD indicator had already dropped significantly below the zero mark, which limited the pair's downward potential. For this reason, I did not sell the pound and turned out to be right.

The British pound failed to benefit from the Confederation of British Industry's retail sales data. This is due to continued cautious sentiment among investors and ongoing concerns over the outlook for the UK economy, which weigh on the currency. In addition, the strong U.S. dollar, supported by the Federal Reserve's restrictive monetary policy, continues to exert further pressure on the pound. Therefore, in the short term, the outlook for the British currency remains challenging. The lack of U.S. data in the second half of the day will likely support the dollar more than the pound, so I expect pressure on the GBP/USD pair to persist.

As for the intraday strategy, I will focus on implementing scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today upon reaching the entry point around 1.3437 (green line on the chart), targeting a rise toward 1.3493 (thicker green line). At 1.3493, I will exit long positions and open short ones in the opposite direction (expecting a 30–35 point pullback). A strong pound rally today is only likely as part of a correction. Important! Before buying, make sure the MACD indicator is above the zero mark and just starting to rise from it.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.3405 level, at a time when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upward. A rise to the opposite levels of 1.3437 and 1.3493 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after breaking below the 1.3405 level (red line on the chart), which will likely trigger a quick decline in the pair. The key target for sellers will be the 1.3363 level, where I plan to exit short positions and immediately open long positions in the opposite direction (expecting a 20–25 point pullback). Sellers are ready to act at any opportunity. Important! Before selling, make sure the MACD indicator is below the zero mark 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 1.3437 level, when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline to the opposite levels of 1.3405 and 1.3363 can be expected.

Chart Legend:

• Thin green line – entry price for buying the trading instrument
• Thick green line – suggested level to set Take Profit or manually fix profits, as further growth above this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – suggested level to set Take Profit or manually fix profits, as further decline below this level is unlikely
• MACD indicator – When entering the market, it's important to rely on overbought and oversold zones

Important: Beginner Forex traders should be very cautious when entering the market. It's best to stay out of the market ahead of important fundamental reports to avoid sudden price spikes. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Without stop-losses, you may quickly lose your entire deposit, especially if you ignore money management and trade large volumes.

And remember: successful trading requires a clear trading plan like the one I outlined above. Spontaneous trading decisions based on current market conditions are a losing strategy for any intraday trader.