Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3238 price level occurred when the MACD indicator had just begun rising from the zero line, which confirmed a valid entry point for buying the pound in line with the trend. However, the pair failed to continue its upward movement, resulting in a loss.

Yesterday's mixed labor market data from the UK limited the pair's upside potential. The reports showed an unexpectedly lower number of jobless claims and a corresponding decline in average earnings in the UK. Despite the initial hesitation caused by these conflicting signals, traders focused on the Bank of England's dovish monetary policy stance, which it plans to maintain due to the steady decline in inflation. New figures on the UK Consumer Price Index and core prices will be released today. Investors are closely monitoring any signs of persistent inflation, as this could prompt the BoE to leave rates unchanged at the upcoming meeting. However, it's worth noting that the pound's growth could be short-lived if the data turn out to be mixed or disappointing. The market is susceptible to the slightest hint of a change in the BoE's tone.

For intraday strategy, I will focus primarily on Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today if the price reaches the entry point around 1.3297 (green line on the chart), with a target of 1.3355 (thicker green line on the chart). Around the 1.3355 level, I will exit long positions and open short positions (expecting a 30–35 pip pullback). A continuation of the upward trend is possible today following strong economic data.

Important! Before buying, make sure the MACD indicator is above the zero line and just beginning to rise.

Scenario #2: I also plan to buy the pound today in the event of two consecutive tests of the 1.3252 level while the MACD indicator is in the oversold area. This would limit the pair's downside potential and could lead to a bullish reversal. A price increase toward the opposite levels of 1.3297 and 1.3355 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after a breakout below 1.3252 (red line on the chart), likely triggering a sharp drop in the pair. The key target for sellers will be the 1.3196 level, where I plan to exit short positions and immediately open long positions (expecting a 20–25 pip reversal). Be very cautious when selling the pound.

Important! Before selling, make sure the MACD indicator is below the zero line and beginning to decline.

Scenario #2: I also plan to sell the pound today in the event of two consecutive tests of the 1.3297 level while the MACD indicator is in the overbought area. This would limit the pair's upside potential and could lead to a bearish reversal. A decline toward the opposite levels of 1.3252 and 1.3196 can be expected.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.