Trade Analysis and Advice for the British Pound

The test of the price at 1.3295 occurred when the MACD indicator was just beginning to move upward from the zero mark, confirming a valid entry point to buy the pound. As a result, the pair rose to around 1.3342.

Yesterday's decision by the Bank of England's Monetary Policy Committee to keep the key interest rate at 3.75% was predictable but still significant in the financial arena. This decision reflects the central bank's commitment to maintaining stability amid rising uncertainty caused by the new wave of tensions in the Middle East. However, beneath this apparent stability lies a clear warning. The Bank of England made it clear that the current level of rates is not the final point. In its statement, the central bank explicitly expressed its readiness to raise interest rates in the foreseeable future, which contributed to the rapid rise of the pound in the second half of the day.

Today, investors and experts will focus on two key economic indicators that are of moderate but significant interest in assessing the health of the British economy. First, there will be the report on the net volume of public sector borrowing in the United Kingdom. This indicator reveals the scale of government debt and the government's need to raise funds to cover its expenses. Changes in this figure can indicate the fiscal strategy of the cabinet, its ability to manage public finances, and the potential impact on public debt.

The second significant event will be the release of data on the balance of industrial orders from the Confederation of British Industry. A positive orders balance indicates an uptick in industrial activity, increased production volumes, and consequently, potential GDP growth. Conversely, negative figures may signal stagnation or a downturn in the manufacturing sector, serving as a warning sign for the broader economy.

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

Buy Scenarios

• Scenario #1: I plan to buy the pound today upon reaching the entry point around 1.3415 (the green line on the chart), with a target for growth towards 1.3452 (the thicker green line on the chart). At the level of 1.3452, I plan to exit the market and open a short position in the opposite direction, expecting a move of 30-35 pips back from the entry point. Growth for the pound today can be anticipated as a continuation of yesterday's trend. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.
• Scenario #2: I also plan to buy the pound today if the price tests 1.3397 twice in a row while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth to the opposite levels of 1.3415 and 1.3452 can be expected.

Sell Scenarios

• Scenario #1: I plan to sell the pound today after updating the level to 1.3397 (the red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be the 1.3360 level, where I plan to exit the shorts and immediately open long positions in the opposite direction, expecting a 20-25-pip move back from the level. Weak UK data may put pressure on the pair. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline from it.
• Scenario #2: I also plan to sell the pound today if two consecutive tests of 1.3415 occur while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decrease to the opposite levels of 1.3397 and 1.3360 can be expected.

What's on the Chart:

• The thin green line represents the entry price at which you can buy the trading instrument;
• The thick green line is the assumed price where you can set Take Profit or manually take profit, as further growth above this level is unlikely;
• The thin red line indicates the entry price at which you can sell the trading instrument;
• The thick red line is the assumed price where you can set Take Profit or manually take profit, as further decline below this level is unlikely;
• The MACD indicator. When entering the market, it's important to refer to the overbought and oversold zones.

Important: Beginner traders in the forex market need to make entry decisions very carefully. It is best to stay out of the market before the release of important fundamental reports to avoid sharp fluctuations in prices. If you choose to trade during the release of news, always set Stop Loss orders to minimize losses. Without placing Stop Loss orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember, successful trading requires 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 intraday traders.