Trade Review and Trading Advice for the British Pound

The test of the 1.3340 level occurred when the MACD indicator had already moved significantly below the zero mark. However, given the escalation of the geopolitical conflict, I continued selling the pound. As a result, the pair declined to the target level of 1.3284.

Donald Trump's statements that the war in Iran will continue for as long as necessary led to dollar buying and a decline in the pound. Such rhetorical signals from the U.S. president, emphasizing the prolonged nature of a potential conflict, are traditionally perceived by markets as a factor supporting the strengthening of the U.S. currency. Uncertainty related to a possible escalation of the military conflict in the Middle East is putting pressure on global market sentiment, and currencies of countries with open economies, such as the United Kingdom, often come under pressure. Investors fear the negative impact of a prolonged military campaign on global trade and economic growth, which in turn reduces the attractiveness of the pound as an investment instrument.

In the second half of the day, financial markets will move into a state of heightened attention. This is due to the upcoming speeches by two influential figures from the U.S. Federal Reserve: New York Federal Reserve Bank President John Williams and his colleague from Minneapolis, Neel Kashkari. Both speakers carry significant weight in shaping monetary policy and may provide the market with important guidance regarding the Fed's future actions. Particular interest will focus on their comments about the possible timing of interest rate cuts in the United States. Against the backdrop of the recent geopolitical escalation in Iran, analysts and market participants are increasingly discussing the possibility of postponing these timelines to a later date. Rising geopolitical risks often prompt central banks to take a more conservative approach, fearing negative effects on economic growth and inflation.

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

Buy Signal

Scenario No. 1: I plan to buy the pound today upon reaching the entry point around 1.3319 (green line on the chart), targeting growth toward 1.3358 (thicker green line on the chart). Around 1.3358, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move in the opposite direction from that level). Strong pound growth today is unlikely.Important! Before buying, make sure that the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today in the event of two consecutive tests of the 1.3280 level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 1.3319 and 1.3358 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound today after a break below the 1.3280 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be 1.3232, where I will exit short positions and immediately open long positions in the opposite direction (expecting a 20–25 point move in the opposite direction from that level). Pressure on the pound will return in the event of strong economic data. Important! Before selling, make sure that the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound today in the event of two consecutive tests of the 1.3319 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.3280 and 1.3232 can be expected.

Chart Explanation:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated level to set Take Profit or manually lock in profits, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated level to set Take Profit or manually 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 must 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 place stop-loss orders to minimize losses. Without stop-loss orders, you can very 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 solely on the current market situation are inherently a losing strategy for an intraday trader.