Trade Analysis and Tips for the British Pound

The price test at 1.3578 occurred when the MACD indicator had moved significantly below the zero mark, limiting the pair's downward potential. The second test at 1.3578 led to the execution of Scenario #2 to buy the pound; however, the pair did not rise.

The hawkish tone of Kevin Warsh at Jackson Hole supported the dollar, which rose against all currencies, including the pound. The Federal Reserve chair stated that the prevailing focus of the central bank should now be on prices, presenting a tough assessment of inflation: the PCE accelerated to 4.1% over six months, and he considered the summer slowdown insufficient to conclude that underlying trends were improving. At the same time, Warsh characterized the economy as strong, noting the rise in capital expenditures to a peak not seen since 2021, largely driven by artificial intelligence, as well as robust corporate profits and minimal credit spreads. His conclusion that financial conditions are hard to describe as restrictive essentially suggests readiness for a more aggressive policy. Against this backdrop, the British pound became dependent on external forces and surrendered to the dollar. The strengthening of the US dollar amid the Fed's decisive stance undermined demand for riskier assets, and GBP/USD retreated. Given that there are again no fundamental reports from the UK in the first half of the day today, pressure on GBP/USD is likely to persist.

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

Buy Scenarios

Scenario #1: I plan to buy the pound today at an entry point around 1.3548 (the green line on the chart), targeting growth to 1.3568 (the thicker green line on the chart). At around 1.3568, I intend to exit the market and open short positions in the opposite direction (anticipating a movement of 30-35 pips in the opposite direction from the level). It is unlikely that the pound will see growth today. Important! Before buying, ensure that 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 in the event of two consecutive tests of 1.3535 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth can be expected towards opposing levels of 1.3548 and 1.3568.

Sell Scenarios

Scenario #1: I plan to sell the pound today after the 1.3537 level is updated (the red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be 1.3515, where I intend to exit my shorts and buy back immediately (anticipating a move of 20-25 pips in the opposite direction from that level). Bad news will return pressure on the pound. Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting to decline from it.

Scenario #2: I also plan to sell the pound today in the event of two consecutive tests of 1.3548, with the MACD indicator in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline can be expected towards opposing levels of 1.3537 and 1.3515.

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 profit can be realized, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price where take profit can be set, or profit can be realized, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner forex traders need to make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.