Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3356 price level coincided with the moment when the MACD indicator had just started moving downward from the zero mark, confirming a correct entry point for selling the pound. As a result, the pair dropped by more than 30 pips.

Yesterday, Donald Trump stated that he is ready to reduce tariffs for China and has no intention of seeking the dismissal of Federal Reserve Chair Jerome Powell. This triggered a sharp strengthening of the dollar and a weakening of the pound. Trump's statement marked an unexpected turn in U.S.–China trade relations. His willingness to make concessions and lower previously imposed tariffs signals a possible softening of the U.S. stance toward Beijing. His second statement regarding Powell also influenced market dynamics. The decision not to dismiss the Fed Chair reassured investors concerned about political pressure on the central bank.

Today, a mixed picture of the UK's PMI indices in manufacturing and services is expected. The primary focus is on the services sector. A significant deterioration in this area may trigger further declines in the pound. Additionally, a speech by Bank of England Governor Andrew Bailey will attract close attention from market participants. The market is carefully watching for any signals about the state of the UK economy, especially in the context of declining inflation and recession fears. As the primary driver of economic growth, the services sector could provide crucial clues about the future direction of monetary policy. Weak data on service sector activity could increase pressure on the BoE to adopt a more dovish stance, weakening the pound.

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

Buy Signal

Scenario #1: I plan to buy the pound today at the entry point around 1.3325 (green line on the chart) with a target of rising to 1.3360 (thicker green line). Around 1.3360, I intend to exit long positions and open short ones in the opposite direction (expecting a move of 30–35 pips from the entry). Today's pound growth can only be expected following strong PMI indices.

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

Scenario #2: I also plan to buy the pound today if the price tests 1.3295 twice consecutively while the MACD is in the oversold area. This would limit the pair's downside potential and trigger an upward market reversal. Growth toward the opposite levels of 1.3325 and 1.3360 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after a breakout below 1.3295 (red line on the chart), which would lead to a quick decline. The key target for sellers will be 1.3239, where I plan to exit short positions and immediately open long positions in the opposite direction (expecting a move of 20–25 pips in the opposite direction from the level). Selling the pound is justified after weak economic data.

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

Scenario #2: I plan to sell the pound today if the price tests 1.3325 twice consecutively while the MACD is in the overbought zone. This would limit the pair's upside potential and trigger a market reversal downward. A decline toward the opposite levels of 1.3295 and 1.3239 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.