Trade Analysis and Recommendations for the British Pound
The price test of 1.3201 occurred at a time when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. The second test of 1.3201 provided an entry point for selling the pound, but no downward movement followed.
In the first half of the day, the British pound showed a notable increase, receiving a strong boost from the release of fresh economic data. According to the latest reports, UK retail sales in May showed significant improvement, rising by 1.2% compared to the previous month. This result substantially exceeded analysts' expectations of a 0.5% increase.
In the second half of the day, in the absence of significant U.S. economic data, market participants are likely to observe a noticeable decline in volatility. This period of relative calm may support currency stabilization and could allow the pound to extend its gains. However, a strong breakout above the daily high is unlikely.
Regarding the intraday strategy, I will rely mainly on scenarios #1 and #2.
Buy Signal
Scenario #1: Today, pound purchases may be considered if the price reaches the 1.3242 level (green line on the chart), targeting a move toward 1.3281 (thick green line on the chart). At 1.3281, I plan to exit long positions and open short positions in the opposite direction (expecting a reversal of 30–35 points). A strong rally in the pound is unlikely today. Important! Before buying, ensure that the MACD indicator is above the zero line and has just started rising from it.
Scenario #2: I will also consider buying the pound if there are two consecutive tests of 1.3215 while the MACD indicator is in oversold territory. This would limit downward potential and trigger an upward reversal. A move toward 1.3242 and 1.3281 can be expected.
Sell Signal
Scenario #1: I plan to sell the pound after a break below 1.3215 (red line on the chart), which would lead to a quick decline in the pair. The key target for sellers is 1.3168, where I will exit short positions and immediately open long positions in the opposite direction (expecting a 20–25 point reversal). Downward pressure on the pound is unlikely to return today. Important! Before selling, ensure that the MACD indicator is below the zero line and has just started declining from it.
Scenario #2: I will also consider selling the pound if there are two consecutive tests of 1.3242 while the MACD indicator is in overbought territory. This would limit upward potential and trigger a downward reversal. A decline toward 1.3215 and 1.3168 can be expected.
What is shown on the chart:
- Thin green line – entry price for buying the trading instrument;
- Thick green line – expected price level for taking profit or manually closing positions, as further upside above this level is unlikely;
- Thin red line – entry price for selling the trading instrument;
- Thick red line – expected price level for taking profit or manually closing positions, as further downside below this level is unlikely;
- MACD indicator – trading decisions should take into account overbought and oversold zones.
Important: Beginner Forex traders should be very cautious when entering the market. It is best to stay out of the market before major fundamental reports are released to avoid sharp price volatility. If you choose to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you may quickly lose your entire deposit, especially if proper money management is not applied and large position sizes are used.
Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are an inherently losing strategy for intraday traders.
