Trade Analysis and Recommendations for Trading the British Pound
The test of the 1.3490 price level occurred while the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential.
In the second half of the day, all eyes will be on speeches by FOMC members John Williams and Thomas Barkin. If their tone is cautious or dovish, it could trigger further U.S. dollar weakening and, as a result, strengthen the pound. Should Williams and Barkin express concerns about the current economic situation, it may prompt another round of dollar selling. Investors are likely to interpret such comments as a signal of potential future monetary policy easing, leading to further USD weakness. On the other hand, the pound, supported by expectations of a comparatively tighter Bank of England policy, could gain a significant boost. Therefore, the speeches from Williams and Barkin may become decisive intraday triggers for the GBP/USD pair's direction.
As for the intraday strategy, I'll mainly focus on executing scenarios #1 and #2.
Buy Signal
Scenario #1: I plan to buy the pound today upon reaching the entry point around 1.3508 (green line on the chart) with a target of 1.3543 (thicker green line on the chart). At the 1.3543 level, I will exit buy trades and open sell trades in the opposite direction, anticipating a pullback of 30–35 points from the entry point. The outlook favors a potential strong rise in the pound. Important! Before buying, ensure the MACD indicator is above the zero line and just beginning to rise from it.
Scenario #2: I also plan to buy the pound today in the event of two consecutive tests of the 1.3486 level, while the MACD indicator is in the oversold zone. This would limit the downward potential of the pair and likely trigger an upward reversal. A rise toward the opposite levels of 1.3508 and 1.3543 can be expected.
Sell Signal
Scenario #1: I plan to sell the pound today after a breakout below the 1.3486 level (red line on the chart), which would lead to a quick bearish move. The key target for sellers will be the 1.3453 level, where I will exit sell trades and immediately open buys in the opposite direction, aiming for a 20–25 point retracement. The pound may experience a sharp drop in the second half of the day. Important! Before selling, ensure the MACD indicator is below the zero line and just beginning to fall from it.
Scenario #2: I also plan to sell the pound today in the event of two consecutive tests of the 1.3508 level, while the MACD indicator is in overbought territory. This would limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.3486 and 1.3453 can be expected.
What's on the Chart:
- Thin green line – entry price at which the trading instrument can be bought;
- Thick green line – estimated take-profit level or price where profits can be manually secured, as further upside above this point is unlikely;
- Thin red line – entry price at which the trading instrument can be sold;
- Thick red line – estimated take-profit level or price where profits can be manually secured, as further downside below this point is unlikely;
- MACD Indicator – When entering the market, it's essential to rely on overbought and oversold zones.
Important: Beginner Forex traders should make entry decisions with great caution. It's best to stay out of the market before major fundamental reports are released to avoid sharp price movements. If you choose to trade during news releases, always use stop-loss orders to minimize losses. Without proper stop-losses, you could quickly lose your entire account — especially if you're not using sound money management and are trading large volumes.
And remember: successful trading requires a clear trading plan, like the one I've outlined above. Making impulsive trading decisions based on current market conditions is an inherently losing intraday trading strategy.
