Trade analysis and tips on trading the British pound

The test of the 1.3526 price coincided with the MACD indicator already having moved significantly upward from the zero mark, which limited the pair's upward potential. The second test of this price occurred when the MACD was in the overbought area, which allowed Scenario No. 2 for selling to play out, resulting in a 20-point decline in the pair.

Yesterday's speech by Fed Chair Jerome Powell, who noted the difficult path ahead for the committee, worked in favor of pound buyers, putting pressure on the U.S. dollar. However, it was not enough for the pair to break out of the sideways channel. Investors took his words as a hint at further monetary easing, which weakened the dollar's position.

Today, there are no statistics in the first half of the day, with only a speech expected from MPC member Megan Greene of the Bank of England. Markets are likely to remain in anticipation of key U.S. news scheduled for the second half of the day, and Greene's remarks will probably not have a significant impact on pound dynamics. However, traders should pay attention to any unexpected comments she makes about the current UK economic situation and the future of the Bank of England's monetary policy. If she voices concern about inflation, it may support the pound. At the same time, softer comments on growth prospects or a call to maintain current policy could weaken the pound. It is important to consider the context of her speech and compare her remarks with previous statements by other MPC members.

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

Buy scenarios

Scenario No. 1: I plan to buy the pound today at an entry point around 1.3512 (green line on the chart), targeting 1.3564 (thicker green line on the chart). Around 1.3564, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 point reversal from the level). Strong growth in the pound today is unlikely. Important! Before buying, make sure 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 if there are two consecutive tests of the 1.3487 price when the MACD is in the oversold area. This will limit the pair's downward potential and trigger a reversal upward. Growth can be expected toward the opposite levels of 1.3512 and 1.3564.

Sell scenarios

Scenario No. 1: I plan to sell the pound today after the 1.3487 level is updated (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be 1.3454, where I intend to exit shorts and immediately open long positions in the opposite direction (expecting a 20–25 point reversal from the level). Pound sellers may appear at any moment. Important! Before selling, make sure 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 case of two consecutive tests of the 1.3512 level when the MACD is in the overbought area. This will limit the pair's upward potential and trigger a reversal downward. A decline can be expected toward the opposite levels of 1.3487 and 1.3454.

What's on the chart:

• Thin green line – entry price for buying the instrument.
• Thick green line – estimated price for setting Take Profit or fixing profit manually, as further growth above this level is unlikely.
• Thin red line – entry price for selling the instrument.
• Thick red line – estimated price for setting Take Profit or fixing profit manually, as further decline below this level is unlikely.
• MACD indicator. When entering the market, it is important to use overbought and oversold zones as guidance.

Important: Beginner forex traders should be very cautious when making entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you ignore money management and trade with large volumes.

And remember, successful trading requires a clear trading plan, like the one I have outlined above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.