Trade Review and Trading Tips for the British Pound

The test of the 1.3684 price level occurred at the moment when the MACD indicator was just beginning to move upward from the zero line, which confirmed a correct entry point for buying the pound. As a result, the pair rose by 30 points.

The strengthening of the British currency was driven by favorable PMI data in the manufacturing sector, which not only remained above the 50-point mark but also showed further growth. This indicates continued stability in the UK economy—at least in the manufacturing sector—despite inflationary pressure and geopolitical uncertainty.

Next, the U.S. ISM index will be an important indicator of the state of the American economy. A reading above 50 points, similar to the UK, would indicate expanding activity, while a figure below this level would signal contraction. Expectations for today's ISM index are fairly subdued, and any deviation from forecasts could trigger noticeable market volatility.

As for the speech by Raphael Bostic, President of the Federal Reserve Bank of Atlanta, attention will be focused on his comments regarding the current Fed monetary policy and the prospects for further interest rate cuts. Investors will be looking for clues as to how the Federal Reserve assesses the risks of inflation and an economic slowdown.

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

Buy Signal

Scenario No. 1

I plan to buy the pound today upon reaching an entry point around 1.3715 (green line on the chart), with a growth target at 1.3750 (the thicker green line on the chart). Around 1.3750, I will exit long positions and open short positions in the opposite direction, targeting a 30–35 point move in the opposite direction from that level. Pound growth today can be expected following weak U.S. data.

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

Scenario No. 2

I also plan to buy the pound today if there are two consecutive tests of the 1.3686 level while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and lead to a market reversal to the upside. Growth can be expected toward the opposite levels of 1.3715 and 1.3760.

Sell Signal

Scenario No. 1

I plan to sell the pound today after a break below the 1.3686 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be 1.3648, where I plan to exit short positions and immediately open buy positions in the opposite direction, targeting a 20–25 point move in the opposite direction from that level. Pressure on the pound will return today in the event of strong data.

Important! Before selling, make sure the MACD indicator is below the zero line and is just beginning to fall from it.

Scenario No. 2

I also plan to sell the pound today if there are two consecutive tests of the 1.3715 level while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and lead to a market reversal to the downside. A decline can be expected toward the opposite levels of 1.3686 and 1.3648.

What's on the Chart

• Thin green line – entry price for buying the trading instrument
• Thick green line – projected price where Take Profit can be set or profits can be manually secured, as further growth above this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – projected price where Take Profit can be set or profits can be manually secured, as further decline below this level is unlikely
• MACD indicator – when entering the market, it is important to rely on overbought and oversold zones

Important

Beginner Forex traders should be extremely cautious when making market entry decisions. Before the release of major fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly—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 presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.