Analysis of Trades and Trading Advice for the British Pound

The test of the 1.3246 price level occurred when the MACD indicator had just started moving upward from the zero line, confirming the validity of the entry point for a long position on the pound. As a result, the pair rose more than 30 points above the target level.

Today's speech by one of the Bank of England representatives did not cause any significant market reaction, although it provided some support for the pound. Recently, there has been increasing discussion about the need for the regulator to maintain a more restrictive policy. Given that GBP/USD subsequently declined significantly, market participants appear to be continuing to increase short positions while taking advantage of the current conditions. No significant US economic data are expected in the second half of the day, so market attention will once again turn to speeches by Federal Reserve representatives. Michelle Bowman, Lisa D. Cook, and Thomas Barkin are scheduled to speak, and their comments will influence market sentiment toward the US dollar. Such speakers usually explain how they assess inflation, how tight the labor market is, and what this means for future interest-rate decisions. Interest rates have already been raised this month, while these policymakers have increasingly called for maintaining a restrictive stance. I believe that, under these conditions, only a significant change in their rhetoric would allow the pound to continue its morning recovery attempt against the dollar. If their tone remains unchanged, traders will become more confident in expectations of further tightening, and the US dollar will likely retain its advantage, making it difficult for GBP/USD buyers to extend the upward move.

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

Buy Signal

Scenario No. 1: Today, I plan to buy the pound when the entry point is reached around 1.3260 (the green line on the chart), with a target of a move up to 1.3280 (the thicker green line on the chart). Around 1.3280, I will close the long position and open a short position in the opposite direction, targeting a move of 30–35 points from the level. A rise in the pound today can be expected only if policymakers make very dovish comments. Important! Before buying, make sure that the MACD indicator is above the zero line and has only just started rising from it.

Scenario No. 2: I also plan to buy the pound today if the price tests 1.3249 twice consecutively while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and lead to an upward reversal. A rise toward the opposite levels of 1.3260 and 1.3280 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after the 1.3249 level is breached (the red line on the chart), which could lead to a rapid decline in the pair. The key target for sellers will be 1.3225, where I will close the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Strong selling pressure on the pound could return at any time. Important! Before selling, make sure that the MACD indicator is below the zero line and has only just started declining from it.

Scenario No. 2: I also plan to sell the pound today if the price tests 1.3260 twice consecutively while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.3249 and 1.3225 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 estimated price level where Take Profit can be placed or profits can be taken manually, as a further rise above this level is considered unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated price level where Take Profit can be placed or profits can be taken manually, as a further decline below this level is considered unlikely;
• MACD indicator. When entering the market, it is important to take overbought and oversold zones into account.

Important. Beginner Forex traders should make entry decisions very carefully. Before the release of important fundamental reports, it is generally preferable to remain out of the market in order to avoid exposure to sharp exchange-rate fluctuations. If you decide to trade during news releases, always use stop orders to limit potential losses. Without stop orders, you can lose your entire trading deposit very quickly, especially if you do not use proper money management and trade large position sizes.

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 inherently an unsuccessful intraday trading strategy.