Trade Analysis and Tips for Trading the British Pound

The test of the price at 1.3495 coincided with the moment when the MACD indicator was just starting to move upward from the zero mark, confirming the correct entry point for buying the pound. As a result, the pair rose by 10 pips.

Today, the U.S. dollar has shown noticeable strengthening against the British pound. Financial markets reacted promptly to alarming news about U.S. Air Force strikes against Iranian targets, including vessels in the Strait of Hormuz and other strategic sites within Iran.

Regarding data, only the retail sales report from the Confederation of British Industry is expected in the first half of the day. Weak figures could increase pressure on the British pound. However, even if the report turns out to be moderately positive, the market is likely to remain cautious. Investors are concerned about the overall state of the economy, not just short-term trends.

For the intraday strategy, I will primarily rely on implementing Scenarios #1 and #2.

Buy Scenarios

• Scenario #1: I plan to buy the pound today upon reaching an entry point around 1.3485 (the green line on the chart) with a target for growth to 1.3520 (the thicker green line on the chart). At around 1.3520, I intend to exit the long positions and open short positions immediately on the bounce, anticipating a 30-35-pip move in the opposite direction from the level. Strong pound growth today is only expected after a breakthrough in the peace agreement. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise from it.
• Scenario #2: I also plan to buy the pound today if the price tests 1.3470 twice in a row while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. We can expect growth to the opposing levels of 1.3485 and 1.3520.

Sell Scenarios

• Scenario #1: I plan to sell the pound today after it breaches 1.3470 (the red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the level of 1.3437, where I plan to exit the shorts and longs immediately in the opposite direction, anticipating a movement of 20-25 pips in the opposite direction from the level. Pressure on the pound may return at any moment. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning to decline from it.
• Scenario #2: I also plan to sell the pound today if the price tests 1.3485 twice in a row while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. We can anticipate a decline to the opposing levels of 1.3470 and 1.3437.

What the Chart Indicates:

• Thin Green Line: Entry price for buying the trading instrument;
• Thick Green Line: Estimated price where take profit can be set or profits can be locked in, as further growth above this level is unlikely;
• Thin Red Line: Entry price for selling the trading instrument;
• Thick Red Line: Estimated price where take profit can be set or profits can be locked in, as further decline below this level is unlikely;
• MACD Indicator: When entering the market, it's important to consider the overbought and oversold zones.

Important Note:

Novice Forex traders must be very cautious when making market entry decisions. It is best to stay out of the market before important fundamental reports are released to avoid sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.