Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3324 price level occurred when the MACD indicator had already moved significantly below the zero line, limiting the pair's downward potential. For this reason, no pound sell positions were opened.

The pound failed to benefit from the quiet UK economic calendar and remained under pressure from the dollar, although this did not trigger a sharp decline. Given that no US economic data is scheduled for release in the second half of the day either, trading activity is likely to remain subdued. However, this does not mean that the dollar will lose its support. Statements made by Fed policymakers over the past week suggest otherwise. On Monday, Goolsbee and Barkin pointed to overheated demand and upside risks to prices, while on Tuesday, Waller supported a rate hike in December, with a possible increase of 50 basis points. Logan stated that at least two 25-basis-point rate hikes would be necessary, while Goolsbee described the inflation report as concerning. Even Paulson saw no decline in core inflation. Against this backdrop, the pound is likely to remain dependent on the dollar and is unlikely to recover until the Bank of England provides new signals.

Regarding the intraday strategy, the focus will primarily be on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: The plan is to buy the pound today when the price reaches the entry level around 1.3330 (the green line on the chart), with a target of 1.3368 (the thicker green line on the chart). Around 1.3368, the long position will be closed and a reverse sell position opened, targeting a move of 30–35 points in the opposite direction from that level. The pound could rise today if US economic data comes in weaker than expected. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from that level.

Scenario #2: The pound can also be bought today if the price tests the 1.3313 level twice consecutively while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger an upward market reversal. The price could then rise toward the opposite levels of 1.3330 and 1.3368.

Sell Signal

Scenario #1: The plan is to sell the pound after the price breaks below 1.3313 (the red line on the chart), which could trigger a rapid decline in the pair. The sellers' key target will be 1.3283, where the short position will be closed and a reverse buy position opened immediately, targeting a move of 20–25 points in the opposite direction from that level. Strong selling pressure on the pound could return if US economic data exceeds expectations. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from that level.

Scenario #2: The pound can also be sold today if the price tests the 1.3330 level twice consecutively while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a downward market reversal. The price could then decline toward the opposite levels of 1.3313 and 1.3283.

What the Chart Shows

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated price level at which Take Profit orders can be placed or profits can be taken manually, as further upward movement above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated price level at which Take Profit orders can be placed or profits can be taken manually, as further downward movement below this level is unlikely;
• MACD indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important. Beginner Forex traders should exercise extreme caution when making entry decisions. It is best to stay out of the market ahead of major fundamental data releases to avoid exposure to sharp exchange rate fluctuations. If trading during news releases, always place stop-loss orders to minimize potential losses. Without stop-loss orders, the entire trading account can be depleted very quickly, especially when risk management principles are not followed and large position sizes are used.

Remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on current market conditions is fundamentally a losing strategy for an intraday trader.