Trade Review and Tips for Trading the British Pound

The test of the 1.3486 level occurred when the MACD indicator had just begun moving downward from the zero line, confirming a valid entry point for selling the pound. However, this did not lead to a major decline, and buying at 1.3497 turned out to be more successful.

Positive news from the UK, particularly related to PMI indices, halted the pound's decline in the first half of the day. Such positive economic signals usually stimulate capital inflows into the country and support the national currency. However, due to the situation in the Middle East and continued strong demand for the US dollar, this did not happen. The market remains cautious, with the tense geopolitical situation around the Strait of Hormuz being the main reason for this restrained behavior.

In the second half of the day, similar reports are expected, but from the United States. It will begin with manufacturing and services PMI data and conclude with the composite PMI. Together, these indicators will provide a comprehensive picture of the state of the US economy, allowing investors and analysts to assess growth rates and potential risks. The manufacturing PMI, calculated by the Institute for Supply Management (ISM), is traditionally one of the key indicators of industrial activity. A reading above 50 signals expansion, while a drop below that level indicates contraction.

As for the intraday strategy, I will mainly rely on implementing Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy the pound today upon reaching the entry point around 1.3498 (green line on the chart), with a target of 1.3519 (thicker green line on the chart). Around 1.3519, I plan to exit long positions and open short positions in the opposite direction (targeting a 30–35 point move). A rise in the pound today can only be expected after weak US data.Important: Before buying, make sure the MACD indicator is above the zero line and just beginning to rise.

Scenario No. 2: I also plan to buy the pound if there are two consecutive tests of the 1.3486 level while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger a reversal upward. Growth toward the opposite levels of 1.3498 and 1.3519 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound after a break below the 1.3486 level (red line on the chart), which would lead to a quick decline in the pair. The key target for sellers will be 1.3457, where I plan to exit short positions and open long positions in the opposite direction (targeting a 20–25 point rebound). Pressure on the pound may return today if the US and Iran take a hardline stance.Important: Before selling, make sure the MACD indicator is below the zero line and just beginning to decline.

Scenario No. 2: I also plan to sell the pound if there are two consecutive tests of the 1.3498 level while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.3486 and 1.3457 can be expected.

Chart Notes

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated Take Profit level or area to lock in profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated Take Profit level or area to lock in profits, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important: Beginner Forex traders should be very cautious when making market entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit—especially if you do not use proper money management and trade large volumes.

And remember: successful trading requires a clear trading plan, like the one outlined above. Spontaneous trading decisions based on current market conditions are inherently a losing strategy for intraday traders.