Trade Analysis and Tips for the British Pound

The price test at 1.2882 occurred when the MACD indicator had just started to move down from the zero line, confirming a valid entry point for selling the pound. As a result, the pair dropped by 40 points.

Pound buyers are staying on the sidelines, clearly unsettled by current market developments. Just a few days ago, they were confidently betting on a return to monthly highs, and today they're worried about the formation of a new bearish trend in the pair. Positive data on U.S. consumer credit could push the pound even lower. If the figures match economists' forecasts, they are unlikely to significantly affect the current market dynamics. It would be more reasonable to focus on the speech by FOMC member Adriana D. Kugler, although it is unlikely that she will present any information fundamentally different from what Jerome Powell stated last Friday.

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

Buy Signal

Scenario #1: I plan to buy the pound today at the entry point around 1.2864 (green line on the chart), targeting a rise to 1.2958 (thicker green line on the chart). Around 1.2958, I plan to exit long positions and open shorts in the opposite direction (expecting a 30–35 point pullback from the level). It will be difficult to count on pound growth today. Important! Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2: I also plan to buy the pound today in the case of two consecutive tests of the 1.2793 level, when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal to the upside. One can expect growth toward the opposite levels of 1.2864 and 1.2958.

Sell Signal

Scenario #1: I plan to sell the pound today after a breakout of the 1.2793 level (red line on the chart), which would lead to a rapid decline in the pair. The main target for sellers will be the 1.2694 level, where I plan to exit short positions and open long positions in the opposite direction (expecting a 20–25 point move in the opposite direction from the level). Sellers will assert themselves in case of strong U.S. data. Important! Before selling, make sure the MACD indicator is below the zero line and just starting to move down from it.

Scenario #2: I also plan to sell the pound today in the case of two consecutive tests of the 1.2864 level, when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. One can expect a decline toward the opposite levels of 1.2793 and 1.2694.

What's on the Chart:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated level for placing Take Profit or manually locking in profits, as further growth beyond this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated level for placing Take Profit or manually locking in profits, as further decline beyond this level is unlikely;
• MACD Indicator – when entering the market, it is important to rely on overbought and oversold zones.

Important: Beginner Forex traders should be extremely cautious when making decisions to enter the market. It is best to stay out of the market before the release of important fundamental reports to avoid being caught in sharp price swings. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop orders, you can very quickly lose your entire deposit, especially if you don't use money management and trade large volumes.

And remember, successful trading requires a clear trading plan, like the one I've outlined above. Spontaneous trading decisions based on current market conditions are inherently a losing strategy for intraday traders.