Trade Analysis and Tips for Trading the British Pound

The price test at 1.3154 coincided with the moment when the MACD indicator had moved significantly below the zero mark, limiting the pair's downward potential. For this reason, I did not sell the pound. The second test at 1.3154 coincided with the MACD being in the oversold area, prompting the implementation of Scenario #2 to buy the pound and resulting in a rise to around 1.3215.

Good GDP data from the U.S. and the increase in the personal consumption expenditures index did not dissuade pound buyers. Apparently, the data was not as inflated as the market expected. The GDP acceleration to 2.1% in the first quarter and the 0.3% increase in the core PCE, while indicating the resilience of the U.S. economy, did not provoke the expected reaction in favor of purchasing the dollar.

Unfortunately, there are no reports from the UK today and no speeches from Bank of England representatives, so the pound will maintain chances for growth by the end of the week. The lack of new data means the market will have to rely on existing information, and the current sentiment towards the British currency remains moderately positive.

It is important to note that, despite some stabilization, the overall picture for the British pound remains quite complex. Numerous external and internal factors continue to exert pressure on the currency. However, the current reaction to U.S. data demonstrates that short-term trader sentiment may be more optimistic than previously thought.

Regarding the intraday strategy, I will focus more on implementing scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy the pound today when the entry point reaches around 1.3211 (the green line on the chart), aiming for growth towards 1.3239 (the thicker green line on the chart). Around 1.3239, I intend to exit the long positions and open short positions back, anticipating a move of 30-35 pips in the opposite direction from that level. Expectations for the pound's rise today can only be based on the context of correction. Important! Before buying, ensure the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of 1.3193 while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. An increase to the opposite levels of 1.3211 and 1.3239 can be expected.

Sell Scenarios

Scenario #1: I plan to sell the pound today after a breach of the 1.3193 level (red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be 1.3165, where I plan to exit the shorts and immediately open longs (anticipating a move of 20-25 pips in the opposite direction from that level). Negative news will strengthen the pressure on the pound. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario #2: I also plan to sell the pound today if there are two consecutive tests of 1.3211 while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decrease to the opposite levels of 1.3193 and 1.3165 can be anticipated.

What's on the Chart:

Thin green line – entry price for buying the trading instrument;

Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;

Thin red line – entry price for selling the trading instrument;

Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;

MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp 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 are not using money management and are trading large volumes.

And remember, for successful trading, you need 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.