Trade Analysis and Recommendations for the British Pound

The test of the 1.3543 level in the first half of the day occurred when the MACD indicator had already moved well below the zero line, limiting the pair's downward potential. For this reason, I did not sell the pound.

Mediocre U.K. data failed to contribute to the pound's decline, as few are willing to go against the bullish market for now. However, economic growth prospects remain uncertain, and aggressive monetary policy could lead to a recession—thereby capping the pair's upside at current highs.

In the second half of the day, focus shifts to the U.S. economy, where the main events will be the release of the Consumer Confidence Index and Durable Goods Orders. These indicators serve as barometers for the state of U.S. consumers and the manufacturing sector, respectively. A rise in consumer confidence, supported by an increase in durable goods orders, would signal steady economic growth and could support the U.S. dollar. Conversely, a decline in these indicators may raise concerns about a slowdown and weaken the dollar.

Special attention should also be paid to Federal Reserve speakers. Their rhetoric, particularly regarding inflation outlooks and monetary policy, will be closely analyzed by investors.

As for the intraday strategy, I'll rely mainly on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound when the price reaches 1.3555 (green line on the chart), targeting a rise to 1.3590 (thicker green line on the chart). At 1.3590, I'll exit long positions and open shorts in the opposite direction, expecting a 30–35 point reversal. Pound strength today is possible after weak U.S. data. Important! Before buying, make sure the MACD is above the zero line and just beginning to rise.

Scenario #2: I also plan to buy the pound if there are two consecutive tests of the 1.3532 level while the MACD is in oversold territory. This would limit the pair's downside and likely prompt a reversal to the upside, with a move toward 1.3555 and 1.3590.

Sell Signal

Scenario #1: I plan to sell the pound after a breakout below 1.3532 (red line on the chart), which would lead to a quick drop. The primary target for sellers will be 1.3498, where I'll exit short trades and open long positions in the opposite direction, aiming for a 20–25 point rebound. Strong selling pressure may persist today following economic data. Important! Before selling, ensure the MACD is below the zero line and just starting to decline.

Scenario #2: I'll also consider selling the pound if there are two consecutive tests of the 1.3555 level while MACD is in overbought territory. This would cap the pair's upside and trigger a reversal to the downside, with expected movement toward 1.3532 and 1.3498.

Chart Legend:

• Thin green line – Entry price for buying the instrument
• Thick green line – Suggested Take Profit level, or a price where profit can be secured, as further upside is unlikely above this point
• Thin red line – Entry price for selling the instrument
• Thick red line – Suggested Take Profit level, or a price where profit can be secured, as further downside is unlikely below this point
• MACD indicator – When entering the market, it is essential to consider overbought and oversold zones

Important Note for Beginner Forex Traders:

New traders must exercise extreme caution when entering the market. It is best to stay out before key fundamental reports are released to avoid being caught in volatile price swings. If you do choose to trade during news events, always set stop-loss orders to minimize losses. Without them, you risk losing your entire deposit—especially if you ignore money management principles and trade with large volumes.

And remember, successful trading requires a clear plan—like the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for intraday traders.