Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3427 price level occurred when the MACD indicator had already moved significantly down from the zero mark, which limited the pair's downside potential. As a result, I missed the pound's downward move. Buying on a rebound from 1.3406 allowed me to pull about 15 points of profit from the market.

Yesterday, the pound fell only slightly against the US dollar. The relative resilience of the British currency, however, surprises many analysts, given the challenging economic situation in the United Kingdom. Although inflation shows signs of slowing, it remains at a high level, putting pressure on consumer spending and investment. Nevertheless, the pound is supported by expectations regarding the Bank of England's next moves. Markets believe the central bank will continue cutting interest rates, but at the same pace previously announced, without any surprises.

Today, in the first half of the day, data is expected on changes in the number of unemployment benefit claims in the UK, the unemployment rate, and the change in average earnings. This data set will be another important piece in the puzzle reflecting the state of the UK labor market and will have a significant impact on the further trajectory of the Bank of England's monetary policy. Special attention will be paid to the unemployment rate. Its stability or further decline may indicate economic resilience, with the ability to absorb the negative effects of inflation and geopolitical uncertainty. Conversely, a rise in unemployment could be an alarming signal, pointing to a slowdown in economic growth and a possible move into recession. Equally important is the indicator of changes in average earnings. Its dynamics, on one hand, reflect the population's standard of living, and on the other, have a direct impact on inflation. Accelerated wage growth can fuel inflationary pressure, requiring more aggressive measures from the BoE.

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

Buy Scenario

Scenario No. 1: Today, I plan to buy the pound when the entry point reaches the area of 1.3449 (green line on the chart) with the target of rising to the 1.3491 level (thicker green line on the chart). Around 1.3491, I intend to close buy positions and open sell positions in the opposite direction (aiming for a 30–35-point move in the opposite direction from the level). Pound growth today can be expected as a continuation of the bullish trend. Important: Before buying, ensure the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario No. 2: I also plan to buy the pound today in the event of two consecutive tests of the 1.3421 price level at a time when the MACD indicator is in the oversold zone. This will limit the pair's downside potential and lead to an upward reversal. Growth toward the opposite levels of 1.3449 and 1.3491 can be expected.

Sell Scenario

Scenario No. 1: I plan to sell the pound today after the 1.3421 level (red line on the chart) is updated, which will lead to a rapid decline in the pair. The key target for sellers will be the 1.3382 level, where I intend to exit sell positions and immediately open buys in the opposite direction (aiming for a 20–25-point move in the opposite direction from the level). Selling the pound today is only advisable after weak data. Important: Before selling, ensure the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario No. 2: I also plan to sell the pound today in the event of two consecutive tests of the 1.3449 price level at a time when the MACD indicator is in the overbought zone. This will limit the pair's upside potential and lead to a reversal downward. A decline toward the opposite levels of 1.3421 and 1.3382 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.