Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3311 level in the second half of the day occurred just as the MACD indicator was beginning to move downward from the zero line, confirming a valid market entry point. As a result, the pound fell toward the target level of 1.3267, allowing for a profit of around 30 pips.

The pound reacted sharply to the news that manufacturing activity in the U.S. was declining at a slower pace than economists had anticipated. However, this unexpected — albeit minor — improvement is unlikely to indicate genuine strength in the U.S. economy. Investors remain concerned about the economic slowdown, which is expected to worsen in the second quarter as Trump's tariffs take further effect. Dollar strength, in turn, pressured the pound since a stronger dollar makes British assets less attractive to foreign investors.

No UK data is scheduled for today, so buyers will likely try to regain control after yesterday's late-day losses. Their optimism may be supported by expectations of further stimulus from the government and central bank and hopes for a swift resolution to trade disputes. However, it's important to remember that markets often get ahead of events, and euphoria can quickly turn to disappointment if reality proves less favorable.

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 1.3326 (green line on the chart), targeting a rise to 1.3384 (thicker green line). Around 1.3384, I will exit long positions and open short positions in the opposite direction, anticipating a 30–35 pip pullback. Pound appreciation today is only considered a corrective move.

Important: Before buying, make sure the MACD indicator is above the zero line and just beginning to rise.

Scenario #2: I also plan to buy the pound if 1.3294 is tested twice in a row while the MACD is in the oversold zone. This will limit the pair's downside potential and likely trigger a bullish reversal. A rise toward 1.3326 and 1.3384 can be expected.

Sell Scenario

Scenario #1: I plan to sell the pound after 1.3294 (red line) is broken, which could trigger a sharp drop. The primary target will be 1.3244, where I plan to exit the short and immediately open a buy trade in the opposite direction (expecting a 20–25 pip rebound). Selling the pound is viable after a failed attempt to consolidate near yesterday's high.

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

Scenario #2: I also plan to sell the pound if 1.3326 is tested twice a row while the MACD is in the overbought zone. This would limit upside potential and lead to a bearish reversal. A drop toward 1.3294 and 1.3244 could then follow.

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.