Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3480 level occurred when the MACD indicator began to move down from the zero mark, confirming a valid entry point for selling the pound. As a result, the pair dropped by only 10 pips, after which the pound resumed its upward movement.

The British pound continues to rise against a weakening U.S. dollar, as discussions surrounding the potential dismissal of Federal Reserve Chair Jerome Powell have intensified. This unpredictability in U.S. monetary policy increases the appeal of risk assets, traditionally including the British currency.

Today, in the continued absence of any significant data from the United Kingdom, we can conclude that the pair is likely to continue its upward movement in the short term. However, such momentum should not lull investors into complacency. A lack of news does not mean a lack of risks; instead, it shifts the focus to other factors that could alter the upward trend. It's essential to consider technical analysis. Reaching certain resistance levels could trigger profit-taking, resulting in a price pullback. Additionally, even minor changes in the rhetoric of the Bank of England or the Federal Reserve may significantly impact the exchange rate of the British pound.

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

Buy Scenario

Scenario #1: I plan to buy the pound today at the entry point around 1.3534 (green line on the chart), targeting a rise to 1.3565 (thicker green line on the chart). Around the 1.3565 level, I plan to exit long positions and open short positions in the opposite direction, expecting a 30–35 pip pullback. The expected rise in the pound is in line with the prevailing uptrend.

Important: Before buying, ensure the MACD indicator is above the zero line and is just starting to rise from it.

Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the 1.3514 level while the MACD indicator is in the oversold area. This would limit the pair's downside potential and lead to a reversal to the upside. A rise toward 1.3534 and 1.3565 can then be expected.

Sell Scenario

Scenario #1: I plan to sell the pound today after a break below 1.3514 (red line on the chart), which could lead to a quick decline. The sellers' key target will be 1.3477, where I plan to exit short positions and open long positions in the opposite direction, expecting a 20–25 pip rebound. Pound selling should be approached with caution today.

Important: Before selling, ensure the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the 1.3534 level while the MACD indicator is in the overbought area. This would limit the pair's upside potential and lead to a reversal to the downside. A drop toward 1.3514 and 1.3477 can then 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.