Trade Analysis and Tips for Trading the British Pound

The price test at 1.3073 coincided with the MACD indicator just beginning to move down from the zero line, confirming the correct entry point for selling the pound. However, the pair did not experience a significant drop. Closer to midday, there was a test of the price at 1.3099, which occurred as the MACD began its upward movement from the zero mark, allowing the pound to be bought at acceptable prices. As a result, the pair rose by more than 40 pips.

Yesterday, the Bank of England kept interest rates unchanged. However, the possibility of a rate cut in December led to a surge in volatility, with buyers of the pound emerging as winners. A reduction in rates is likely to support the British economy, which may face new challenges due to the upcoming budget for next year, making a more accommodative policy from the bank more appropriate than its current stance.

Today, market participants will focus on the publication of the Halifax House Price Index in the UK and a speech by Bank of England Monetary Policy Committee (MPC) member Hugh Pill. The Halifax report on property prices is a key barometer of the health of the UK housing sector, and changes in it often reflect consumer confidence and the broader economic situation. Weaker-than-expected figures could weigh on the pound, fueling concerns about slowing economic growth. Huw Pill's comments will also attract attention. Investors will carefully examine his remarks for signals on future interest-rate policy decisions. A dovish tone suggesting a potential rate cut may weaken the pound, whereas hawkish statements could support it.

As for the 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 upon reaching an entry point around 1.3124 (green line on the chart), targeting a rise to 1.3151 (thicker green line on the chart). At the 1.3151 level, I intend to exit my long positions and open shorts in the opposite direction (aiming for a 30-35-pip move). Expectations for the pound to rise today can be based on Pill's dovish stance. Important: Before buying, ensure the MACD indicator is above the zero line and just beginning an upward move.

Scenario #2: I also plan to buy the pound today if the price tests 1.3104 twice in a row while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. We can expect a rise to the opposite levels of 1.3124 and 1.3151.

Sell Scenarios

Scenario #1: I plan to sell the pound today after updating the level to 1.3104 (red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be the 1.3076 level, where I intend to exit my short positions and simultaneously open longs in the opposite direction (aiming for a move of 20-25 pips in the opposite direction from the level). Sellers of the pound may return to the market at any moment. Important: Before selling, ensure the MACD indicator is below the zero line and just beginning its downward movement.

Scenario #2: I also plan to sell the pound today if the price tests 1.3124 twice in a row while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. We can expect a decline to the opposite levels of 1.3104 and 1.3076.

What the Chart Shows:

• Thin Green Line: Entry price for buying the trading instrument.
• Thick Green Line: Estimated price where Take Profit can be set or where profit can be secured, as further increases above this level are unlikely.
• Thin Red Line: Entry price for selling the trading instrument.
• Thick Red Line: Estimated price where Take Profit can be set or where profit can be secured, as further decreases below this level are unlikely.
• MACD Indicator: When entering the market, it is important to be guided by the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making trading entry decisions. It is best to remain out of the market before the release of important fundamental reports to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember that successful trading requires having a clear trading plan, similar to the one I presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.