Trade review and tips for trading the British pound

The price test of 1.3631 occurred when the MACD indicator had already moved far below the zero mark, which limited the pound's downward potential. In the first half of the day, inflation data was released in the UK. The market showed no reaction. The pound sterling continued to trade within a narrow sideways channel. It will likely remain there until the Fed's decision.

In the second half of the day, the FOMC decision on the key interest rate, FOMC economic projections, and Jerome Powell's press conference are expected. Markets are frozen in anticipation. Investors and analysts around the world are preparing for the moment of truth, when the Federal Open Market Committee announces its decision on the key interest rate. In recent months, the economic situation in the country has remained rather weak, and the FOMC's decision could become a catalyst for further moves in financial markets.

Beyond the rate decision itself, close attention will be paid to the economic projections presented by the FOMC. These will provide insight into how committee members view the future of the economy, including prospects for growth, inflation, and employment. Any discrepancies between the FOMC's outlook and market expectations could trigger volatility and repricing of assets. The highlight of the day will be the press conference of Federal Reserve Chair Jerome Powell. He will answer journalists' questions and try to clarify the FOMC's stance, as well as comment on the latest economic data. His words will likely be scrutinized for hints about future monetary policy.

As for intraday strategy, I will rely more on implementing scenarios #1 and #2.

Buy signal

Scenario #1: Today I plan to buy the pound at the entry point around 1.3660 (green line on the chart), targeting growth to 1.3731 (thicker green line on the chart). Around 1.3731 I will close purchases and open sales in the opposite direction (expecting a 30–35-point move back from the level). A strong rise in the pound today can be expected after weak Fed forecasts. Important! Before buying, make sure the MACD indicator is above zero and just beginning to rise from it.

Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the 1.3631 price level at a time when the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to a reversal upward. Growth can be expected toward the opposite levels of 1.3660 and 1.3730.

Sell signal

Scenario #1: I plan to sell the pound today after breaking below 1.3631 (red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be 1.3574, where I will exit sales and immediately open purchases in the opposite direction (expecting a 20–25-point move back from the level). The pound will fall if the Fed takes a firm stance. Important! Before selling, make sure the MACD indicator is below zero and just beginning to move down from it.

Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the 1.3660 price level at a time when the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a reversal downward. A decline can be expected toward the opposite levels of 1.3631 and 1.3574.

What's on the chart:

• Thin green line – entry price for buying the instrument;
• Thick green line – estimated price for placing 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 placing Take Profit or fixing profit manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to follow overbought and oversold zones.

Important. Beginner Forex traders must make entry decisions with great caution. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can very quickly lose your entire deposit, especially if you neglect money management and trade in large volumes.

And remember, successful trading requires a clear trading plan, like the one presented above. Making spontaneous decisions based on the current market situation is initially a losing strategy for an intraday trader.