Review of Trades and Trading Tips for the British Pound

The price test of 1.3543 occurred when the MACD indicator had just started moving upward from the zero line, confirming that this was an appropriate entry point for a long position on the pound. However, the pair failed to move higher. The pound then declined, and a test of 1.3532 as the MACD began moving downward provided an opportunity to enter short positions. At the time of writing, the decline had exceeded 10 points.

Pound buyers made another attempt to break above the major resistance level of 1.3550, but were unsuccessful again. In my view, this is a fairly clear signal, as repeatedly running into the same level confirms that the bulls no longer have sufficient strength. Without a significant fundamental catalyst, it is simply impossible to break such a level, and the British currency currently lacks its own drivers. This is why the focus is shifting to U.S. economic data, which will become the main reference point for the pair in the near term. Today, attention will be focused on the NFIB Small Business Optimism Index and consumer credit data. The NFIB index reflects the sentiment of small businesses, while consumer credit data indicate consumers' willingness to borrow, but I consider both indicators secondary and therefore do not expect them to have a decisive impact on the dollar or, consequently, on the pair. Of greater importance for the British currency will be the scheduled speeches by Bank of England representatives. The central bank's rhetoric could set the tone for the pound, especially as it is currently under pressure and unable to consolidate above resistance.

In my view, if the comments are hawkish, particularly if they emphasize persistent inflation in the services sector, the pound will have a chance to withstand the pressure and allow buyers to regain the initiative. However, given that the Bank of England meeting is already scheduled for next week, I would not expect excessive openness, as policymakers usually avoid making strong statements ahead of a decision. Therefore, if the tone is restrained, GBP/USD will most likely remain dependent on the dollar's dynamics.

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 1.3530 (the green line on the chart), with a target of 1.3548 (the thicker green line on the chart). Around 1.3548, 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 only if U.S. data are weak. Important! Before buying, make sure that the MACD indicator is above the zero line and has only just begun to rise from it.

Scenario #2: I also plan to buy the pound today if the price tests 1.3518 twice consecutively while the MACD indicator is in the oversold area. This would limit the pair's downward potential and lead to an upward reversal. A rise toward the opposite levels of 1.3530 and 1.3548 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell the pound after the 1.3518 level is breached (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 1.3455, 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 pressure on the pound will return if U.S. data are strong. Important! Before selling, make sure that the MACD indicator is below the zero line and has only just begun to decline from it.

Scenario #2: I also plan to sell the pound today if the price tests 1.3530 twice consecutively while the MACD indicator is in the overbought area. This would limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.3518 and 1.3499 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 expected price level where Take Profit can be placed or profits can be closed 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 expected price level where Take Profit can be placed or profits can be closed manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take overbought and oversold zones into account.

Important. Beginner Forex traders should exercise extreme caution when making market-entry decisions. 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 news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

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.