Trade Analysis and Tips for the British Pound

The price test at 1.3348 occurred when the MACD indicator was just starting to move upward from the zero mark, confirming the correct entry point to buy the pound. As a result, the pair rose to the target level of 1.3378.

The weak ISM Services PMI report from the U.S. set the tone for trading yesterday afternoon. The data showed that the business activity index dropped to 54 points, falling short of market expectations. The British pound took advantage of this dollar weakness: the GBP/USD pair rose as demand for the US dollar declined. As long as the dollar remains under pressure from weak data, the pound has the opportunity to consolidate higher, even in the absence of significant internal drivers from the British economy.

Today, an interesting report on the Halifax House Price Index will be released in the UK, along with the Bank of England's Financial Stability Report and a speech by Governor Andrew Bailey. While the pound is currently showing positive momentum, this movement may be short-lived if the BoE chief's comments hint at monetary policy easing or lack sufficient conviction in future measures to combat inflation. The Financial Stability Report may shed light on the central bank's assessment of risks in the banking sector and the overall economic situation. Any concerns expressed in the document could exert additional downward pressure on the pound, even if Bailey's speech is neutral.

Regarding the intraday strategy, I will primarily rely on the implementation of scenarios No. 1 and No. 2.

Buy Scenarios

• Scenario No. 1: I plan to buy the pound today if the price reaches around 1.3385 (green line on the chart), targeting a rise to 1.3409 (thicker green line on the chart). At around 1.3409, I plan to exit from long positions and immediately sell in the opposite direction (aiming for a movement of 30-35 pips back from that level). You can expect the pound to rise today only after positive data. Important! Before purchasing, ensure that the MACD indicator is above the zero mark and just beginning its rise from it.
• Scenario No. 2: I also plan to buy the pound today in the event of two consecutive tests of 1.3371 while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. You can expect growth towards opposing levels of 1.3385 and 1.3409.

Sell Scenarios

• Scenario No. 1: I plan to sell the pound today after it breaks the level at 1.3371 (red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be 1.3344, where I plan to exit short positions and immediately buy in the opposite direction (aiming for a move of 20-25 pips back from that level). Bad news will increase pressure on the pound. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning its decline from it.
• Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of 1.3385 while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. You can expect a decrease towards opposing levels of 1.3371 and 1.3344.

What the Chart Shows:

• The thin green line represents the entry price for buying the trading instrument;
• The thick green line is the estimated price at which to set Take Profit or lock in profits, as further upward movement is unlikely above this level;
• The thin red line is the entry price for selling the trading instrument;
• The thick red line is the estimated price at which to set Take Profit or lock in profits, as further downward movement is unlikely below this level;
• The MACD indicator. It is important to base market entries on overbought and oversold zones.

Important: Beginning traders in the Forex market must make entry decisions very cautiously. Before the release of significant fundamental reports, it is best to stay out of the market to avoid sudden price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I have presented above. Making spontaneous trading decisions based on the current market situation is fundamentally a losing strategy for intraday traders.