Analysis of Trades and Tips for Trading the British Pound

The test of the price at 1.3498 coincided with the moment when the MACD indicator was just starting to move upward from the zero mark, confirming it as a good entry point for buying the pound. As a result, the pair rose to the target level of 1.3519. Short positions at 1.3486 also yielded a profit of about 30 pips.

Yesterday's PMI data from the UK, which supported the pound in the first half of the day, was unable to prevent its decline in the second half. This reflects the complex and multifaceted nature of the current market situation, where individual positive indicators are quickly offset by broader geopolitical factors. Despite encouraging manufacturing activity figures that should have strengthened the currency, traders and investors remain cautious. Pressure on the pair returned, which may be attributed to several factors, including ongoing uncertainty regarding future economic policies, global geopolitical upheavals, and strong macroeconomic data from the US.

In the first half of the day, traders will closely monitor the release of UK retail sales data. This report plays a crucial role in assessing consumer activity and, consequently, the overall state of the economy. Unfortunately, economists' forecasts do not inspire optimism. The published figures are expected to disappoint, indicating a slowdown in consumer spending. The anticipated weak retail data will undoubtedly exert pressure on the British pound. The currency, which has already been hit by negative events from yesterday, could face another wave of decline.

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

Buy Scenarios

Scenario #1: I plan to buy the pound today when the price reaches around 1.3472 (green line on the chart), targeting a move to 1.3503 (thicker green line on the chart). At point 1.3503, I intend to exit the long positions and open short positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from this level). Strong pound growth can only be anticipated after strong economic data. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning its upward movement from there.

Scenario #2: I also plan to buy the pound today if the price tests 1.3457 twice in a row while the MACD indicator is in the oversold area. This will limit the pair's downside potential and may lead to an upward market reversal. An increase can be expected toward the opposite levels of 1.3472 and 1.3503.

Sell Scenarios

Scenario #1: I plan to sell the pound today after it drops below 1.3457 (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 1.3435 level, where I will exit the short positions and immediately buy back in the opposite direction (expecting a 20-25-pip move in the opposite direction from this level). Pressure on the pound may return at any moment. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning its downward movement.

Scenario #2: I also plan to sell the pound today in the case of two consecutive tests of the price at 1.3472 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and may lead to a market reversal downward. A decrease can be expected toward the opposite levels of 1.3457 and 1.3435.

What Is On The Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the expected price where Take Profit can be set, or profits can be secured, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the expected price where Take Profit can be set, or profits can be secured, as further decline below this level is unlikely;
• MACD Indicator. It is important to be guided by overbought and oversold zones upon entering the market.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to be out of the market before important fundamental reports are released to avoid being caught in sharp price fluctuations. If you choose 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. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.