Analysis of Trades and Tips for Trading the British Pound

The price test at 1.3432 occurred when the MACD indicator had risen significantly from the zero mark and had been in the overbought area for quite some time. The second test at 1.3432 provided the reason for the execution of Scenario No. 2 to sell the pound, resulting in a decline of the pair by 20 pips.

The dollar sharply declined, while the British pound rose, following news that the U.S. unemployment rate reached 4.6%. This data raised serious concerns regarding the health of the American economy and the prospects for further rate cuts by the Federal Reserve. However, the British pound was not able to maintain its leading position for long.

In the first half of the day today, several important UK economic indicators are expected to be published: the Consumer Price Index, producer price indicators, and the retail price index. These data will serve as key information on the state of the UK economy and will influence the Bank of England's future decisions on monetary policy. The Consumer Price Index will receive the most attention, as it is the primary measure of inflation in the country. Ongoing CPI growth will likely force the BoE to consider maintaining interest rates at their current level. The Producer Price Index is also significant, as it reflects the price dynamics producers face for raw materials and goods. An increase in CPI may signal a future acceleration of inflation, as producers are likely to pass on these higher costs to consumers.

When considered together, these indicators will provide a complete picture of the current inflation backdrop in the UK and allow for an assessment of the prospects for economic growth in the coming months.

Regarding the intraday strategy, I will rely more on the execution of Scenarios No. 1 and No. 2.

Buy Scenarios

Scenario No. 1: I plan to buy pounds today upon reaching the entry point around 1.3395 (green line on the chart), with a target growth towards 1.3424 (thicker green line on the chart). Near 1.3424, I plan to exit long positions and open shorts in the opposite direction (anticipating a movement of 30-35 pips from the level). Significant growth in the pound can only be expected after strong data. Important! Before buying, ensure that the MACD indicator is above the zero mark and just starting to rise from it.

Scenario No. 2: I also intend to buy pounds today if there are two consecutive tests of 1.3370, during which the MACD indicator is in the oversold area. This will limit the downward potential of the pair and lead to a market reversal upwards. A rise toward the opposite levels of 1.3395 and 1.3424 can be expected.

Sell Scenarios

Scenario No. 1: I plan to sell pounds today after the 1.3370 level is updated (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 1.3344 level, where I plan to exit shorts and immediately open longs in the opposite direction (anticipating a 20-25-pip move back from the level). Sellers of the pound will return with weak inflation data. Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting to decline from it.

Scenario No. 2: I also plan to sell pounds today if there are two consecutive tests of the price at 1.3395 while the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a market reversal downwards. A decline toward the opposite levels of 1.3370 and 1.3344 can be expected.

What is on the Chart:

Thin green line – entry price at which to buy the trading instrument;

Thick green line – estimated price where take profit can be set, or profit can be realized, as further growth above this level is unlikely;

Thin red line – entry price at which to sell the trading instrument;

Thick red line – estimated price where take profit can be set, or profit can be realized, as further decline below this level is unlikely;

MACD indicator. When entering the market, it is important to be guided by overbought and oversold zones.

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

And remember, successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.