Trade Analysis and Tips for Trading the British Pound
The price test at 1.3435 occurred when the MACD indicator had just started moving downward from the zero line, confirming a correct entry point for selling the pound. As a result, the pair dropped by 20 points.
Today, the absence of economic indicators from the United Kingdom may reduce downward pressure on the British pound. The market will focus on other key factors, including U.S. labor market data, so during European trading we are unlikely to see major changes in the GBP/USD pair. The lack of British news will create a kind of pause for the pound, giving it a chance to stabilize after the recent sell-off. However, this pause will likely be short-lived. With the release of U.S. data in the second half of the day, the balance of power may change significantly. Any important U.S. statistics, such as employment and inflation data, can have a strong impact on global currency markets, including the pound. For this reason, market participants trading the pound should exercise particular vigilance and adaptability.
For intraday strategy, I will mainly rely on Scenario 1 and Scenario 2.
Buy Scenarios
Scenario 1: Today, I plan to buy pounds around the entry point of 1.3438 (green line on the chart) with a target of 1.3475 (thicker green line on the chart). Around 1.3475, I plan to exit long positions and open short positions in the opposite direction, expecting a 30–35 point move. It is unlikely that the pound will see strong upward movement today.
Important: Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.
Scenario 2: I also plan to buy pounds today if the price tests 1.3422 twice in a row while the MACD indicator is in the oversold area. This will limit the downward potential of the pair and trigger a market reversal upward. Growth can be expected toward the levels 1.3438 and 1.3475.
Sell Scenarios
Scenario 1: I plan to sell pounds today after the price drops below 1.3422 (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 1.3386, where I plan to exit short positions and open long positions in the opposite direction, expecting a 20–25 point move. Pound sellers may take advantage of a new bearish market.
Important: Before selling, ensure that the MACD indicator is below the zero line and just starting to move downward from it.
Scenario 2: I also plan to sell pounds today if the price tests 1.3438 twice in a row while the MACD indicator is in the overbought area. This will limit the pair's upward potential and trigger a market reversal downward. A decline can be expected toward 1.3422 and 1.3386.
What Is Shown on the Chart
- Thin green line – entry price for buying the instrument.
- Thick green line – approximate price for placing Take Profit or manually taking profit, as further growth above this level is unlikely.
- Thin red line – entry price for selling the instrument.
- Thick red line – approximate price for placing Take Profit or manually taking profit, as further decline below this level is unlikely.
- MACD indicator – when entering the market, pay attention to overbought and oversold zones.
Important Notes for Beginners:
Forex beginners should exercise extreme caution when deciding to enter the market. It is best to stay out of the market before the release of important fundamental reports to avoid sudden price fluctuations. If trading during news releases, always use stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you trade large volumes without proper money management.
Remember, successful trading requires a clear trading plan, like the one outlined above. Making spontaneous trading decisions based on the current market situation is a fundamentally losing strategy for intraday traders.
