Trade Analysis and Tips for Trading the British Pound

There was no testing of the levels I indicated on Friday.

The disappointing retail sales report set the tone for trading and weakened the dollar. Sales in the U.S. fell by 0.6% in July, the worst result in over a year, and excluding automobiles and gasoline, the decline was 0.2%. Since consumption constitutes a major part of the U.S. economy, such weak data undermined arguments for a hawkish Federal Reserve stance, and the American currency lost support. Unfortunately, there are currently no British reports on the calendar that could support further growth in the pound. In this situation, the pound becomes dependent on external forces, and its primary guide remains the sentiment surrounding the dollar. In the absence of drivers, trading in GBP/USD may again shift into a new sideways channel, as, without internal catalysts, it will be difficult for the pair to maintain upward momentum.

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

Buy Scenarios

Scenario No. 1: I plan to buy the pound today when the entry point reaches around 1.3559 (green line on the chart), with a growth target of 1.3587 (thicker green line on the chart). Around 1.3587, I intend to exit my long positions and open short positions in the opposite direction (expecting a 30-35-pip move in the opposite direction from the level). Growth of the pound today can be anticipated to continue in the trend. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting its rise from it.

Scenario No. 2: I also plan to buy the pound today in the event of two consecutive tests of 1.3541, 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 can be expected towards the opposite levels of 1.3559 and 1.3587.

Sell Scenarios

Scenario No. 1: I plan to sell the pound today after the 1.3541 level is updated (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 1.3507, where I plan to exit my shorts and immediately open longs in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Only bad news will bring pressure back on the pound. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting its decline from it.

Scenario No. 2: I also plan to sell the pound today in the event of two consecutive tests of 1.3559, when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market turnaround. A decline towards the opposite levels of 1.3541 and 1.3507 can be expected.

What the Chart Shows:

• Thin green line – entry price for buying 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 for selling 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 forex traders need to make entry decisions very cautiously. Before key 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 orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.