Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3600 level occurred when the MACD indicator had already moved significantly above the zero mark, which limited the pair's upward potential. For this reason, I did not buy the pound. A second test of 1.3600, while the MACD was in the overbought zone, led to the realization of Scenario #2 for selling, resulting in a 20-pip drop in the pair.

Yesterday's news that U.S. producer prices came in lower than economists had expected triggered a further decline in the U.S. dollar and strengthened the pound. This unexpected turn of events in the currency markets sparked a lively discussion among traders and analysts trying to assess the long-term implications for the global economy. The dollar's weakness, driven by disappointing inflation data in the U.S. manufacturing sector, opened the door for gains in other currencies, and the British pound took advantage of the opportunity, showing confident growth.

Today, the pound is unlikely to respond to the results of the inflation expectations survey. The focus has shifted to the geopolitical developments surrounding Israel and Iran, and an escalation of the military conflict could have a strong and negative impact on the pound.

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

Buy Scenario

Scenario #1: I plan to buy the pound today upon reaching the entry point near 1.3555 (green line on the chart) with a target of rising to 1.3609 (thicker green line on the chart). Around 1.3609, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 pips pullback from the level). Counting on strong pound growth today is unlikely.

Important: Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.3526 level while the MACD indicator is in the oversold zone. This will limit the pair's downside potential and trigger an upward reversal. A rise toward the opposite levels of 1.3555 and 1.3609 can be expected.

Sell Scenario

Scenario #1: I plan to sell the pound today after a breakout below the 1.3526 level (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be the 1.3490 level, where I plan to exit short positions and immediately open long positions in the opposite direction (aiming for a 20–25 pip bounce). Selling the pound may be viable for continuing the bearish market.

Important: Before selling, ensure the MACD indicator is below the zero mark and beginning to decline.

Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.3555 level while the MACD indicator is in the overbought zone. This will limit the pair's upside potential and lead to a reversal downward. A drop toward the opposite levels of 1.3526 and 1.3490 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.