Review of Trades and Trading Advice for the British Pound

The levels I indicated were not tested during the first half of the day.

Today's speech by Bank of England Governor Andrew Bailey did not trigger any significant market reaction, and the pound continues its gradual recovery against the U.S. dollar. In my view, this movement is quite natural given the profit-taking following the pair's recent prolonged decline, rather than being the result of any new fundamental signals from the central bank. Given that GBP/USD has declined significantly over the past few sessions, market participants appear to have started partially closing short positions accumulated during the decline, which explains the lack of a pronounced reaction to Bailey's neutral tone. I believe this technical correction could continue, especially if U.S. economic data do not produce any new surprises in favor of the dollar, although it is still too early to speak of a full trend reversal against this backdrop.

For GBP/USD, the key reference points will now be U.S. durable goods orders and the University of Michigan data, including the Consumer Sentiment Index and inflation expectations. In my view, speeches by Williams and Hammack are unlikely to add anything new, as the rhetoric of both speakers has already been heard this week. If today's U.S. data are strong, increasing the market's confidence in further Fed action, GBP/USD could, in my view, return to the weekly low.

As for the intraday strategy, I will focus more on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy the pound today when the entry point reaches the 1.3240 level (the green line on the chart), with the target of rising to 1.3260 (the thicker green line on the chart). Around 1.3260, I will close the long position and open a short position in the opposite direction, targeting a 30–35-point move in the opposite direction from the level. The pound can be expected to rise today only if U.S. data are very weak. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today if the price tests 1.3221 twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal of the market to the upside. A rise toward the opposite levels of 1.3240 and 1.3260 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound today after the 1.3221 level is broken (the red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 1.3198, where I will close the short position and immediately open a long position in the opposite direction, targeting a 20–25-point move in the opposite direction from the level. Strong downward pressure on the pound is unlikely to return today. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound today if the price tests 1.3240 twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal of the market to the downside. A decline toward the opposite levels of 1.3221 and 1.3198 can be expected.

What Is Shown on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the expected price level where Take Profit orders can be placed or profits can be taken manually, 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 level where Take Profit orders can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold zones into account.

Important. Beginner Forex traders need to make market-entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid exposure to sharp exchange-rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making trading decisions spontaneously based on the current market situation is an inherently losing strategy for an intraday trader.