Trade Analysis and Tips for Trading the British Pound

The price test of 1.3521 occurred when the MACD indicator had already moved significantly upward from the zero line, limiting the pair's upward potential. For this reason, I did not buy the pound and missed the move toward 1.3542.

The test of 1.3542 allowed the pound to fully recover the losses incurred after Friday's U.S. labor market report, and this rebound reversed the pair to the upside. In my view, the prospects for further GBP/USD gains today look quite favorable, especially since there are no U.S. economic data releases on the calendar. Without new catalysts, the dollar has little basis for a counter-move, meaning the initiative remains with buyers of the British currency, who are in a better position to maintain their advantage.

It is important to understand that on days when the fundamental backdrop is empty, the direction is determined not by macroeconomic data but by overall risk appetite and the dollar's behavior. As a result, the pound becomes largely dependent on external factors. I expect the pair to maintain its upward bias in calm market conditions and attempt to extend the morning recovery. However, I would not overlook the fact that any renewed demand for the dollar could quickly reverse this upward move. For this reason, in the absence of economic data, it is particularly important to rely on the technical picture and identify in advance the levels from which trading decisions can be made.

As for the intraday strategy, I will focus more on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound when the entry point is reached around 1.3539 (the green line on the chart), with a target of 1.3556 (the thicker green line on the chart). Around 1.3556, I will exit the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. The pound can be expected to rise today as the morning's upward impulse continues. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario #2: Today, I also plan to buy the pound if the price tests 1.3531 twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal of the market to the upside. A rise toward the opposite levels of 1.3539 and 1.3556 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell the pound after the 1.3531 level is broken (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 1.3514, where I will exit the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Strong selling pressure on the pound is unlikely to return today. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario #2: Today, I also plan to sell the pound if the price tests 1.3539 twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal of the market to the downside. A decline toward the opposite levels of 1.3531 and 1.3514 can be expected.

What Is Shown on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated price at which Take Profit can be placed or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated price at which Take Profit can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold areas into account.

Important. Beginner Forex traders should exercise great caution when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid exposure to sharp exchange-rate fluctuations. If you decide to trade during the release of economic news, always place stop orders to minimize losses. Without stop orders, you can lose your entire trading account very quickly, especially if you do not use proper money management and trade large position sizes.

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