Analysis of Trades and Trading Tips for the British Pound

The test of the price at 1.3586 occurred when the MACD indicator was beginning to move upward from the zero mark, confirming the correct entry point for buying the pound. As a result, the pair rose by more than 40 pips.

News of the University of Michigan's decline in inflation expectations in the U.S. exerted slight pressure on the dollar. This is a typical market reaction, as a decrease in inflation expectations is often interpreted as a signal of possible slowing economic growth or, at the very least, stabilizing price dynamics. While inflation expectations had risen consistently in previous months, supporting a strong position for the American currency, the situation has changed somewhat. However, the current significant weakening of the dollar could affect future readings of this indicator.

Today, in the absence of significant macroeconomic reports from the UK, all attention from market participants and experts will focus on the speech by Bank of England Monetary Policy Committee member Catherine L. Mann. Since there are no traditional guidelines to set the direction of trading, the rhetoric of this monetary committee representative will be a decisive factor in influencing the movement of the British pound. Catherine Mann's statements may serve as indicators of the BoE's current assessment of the economic situation, inflation forecasts, and possible directions for future monetary policy actions.

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

Buy Scenarios

• Scenario #1: I plan to buy the pound today upon reaching the entry point around 1.3627 (green line on the chart), targeting a move to 1.3657 (thicker green line on the chart). At approximately 1.3657, I intend to exit my long positions and open shorts in the opposite direction, aiming for a movement of 30-35 pips in the opposite direction from the level. Growth in the pound today can only be anticipated following a strong position from the Bank of England representatives. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise.
• Scenario #2: I also plan to buy the pound today if there are two consecutive tests of 1.3596 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. A rise can be expected to opposing levels of 1.3627 and 1.3657.

Sell Scenarios

• Scenario #1: I plan to sell the pound today after it reaches 1.3596 (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 1.3574 level, where I intend to exit my shorts and also buy immediately on the bounce, aiming for a 20-25-pip move in the opposite direction from the level. Pound sellers will make their presence felt if Mann takes a dovish stance. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline.
• Scenario #2: I also plan to sell the pound today if there are two consecutive tests of 1.3627 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decline can be expected to opposing levels of 1.3596 and 1.3574.

What's on the Chart:

The thin green line represents the entry price at which one can buy the trading instrument;

The thick green line represents the approximate price where one can set Take Profit or secure profits, as further growth above this level is unlikely;

The thin red line represents the entry price at which one can sell the trading instrument;

The thick red line represents the approximate price where one can set Take Profit or secure profits, as further decline below this level is unlikely;

The MACD indicator: when entering the market, it is important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market should be very careful when making entry decisions. It is best to stay out of the market before important fundamental reports are released 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 large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.