Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3405 price level occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downside potential. For this reason, I did not sell the pound and missed the large downward movement of the pair.

Today, data will be released on mortgage applications in the United Kingdom, private sector lending, and changes in the M4 money supply. If the economic indicators are unsatisfactory, the British pound will likely continue to decline against the US dollar. Changes in the M4 money supply serve as a significant indicator of inflation. A contraction in M4 volume may indicate weakening inflationary pressure, which would allow the Bank of England to adopt a more dovish stance on interest rate hikes. However, if the reduction in M4 is accompanied by a deterioration in other economic indicators, it may signal deeper problems in the UK economy. It is also essential to consider the impact of overall sentiment in global markets. The prevailing pessimism regarding the global economy's outlook, following the introduction of various US trade tariffs, may place additional pressure on the pound.

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

Buy Scenario

Scenario No. 1: I plan to buy the pound today upon reaching the entry point around 1.3369 (indicated by the green line on the chart), with a target of rising to 1.3406 (denoted by the thicker green line on the chart). Around 1.3406, I plan to exit long positions and open short positions in the opposite direction (expecting a move of 30–35 pips down from the level). A rise in the pound today can only be expected after strong data.

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

Scenario No. 2: I also plan to buy the pound today in case of two consecutive tests of the 1.3334 price level at a moment when the MACD indicator is in the oversold zone. This will limit the pair's downside potential and lead to a market reversal upward. A rise toward the opposite levels of 1.3369 and 1.3406 can be expected.

Sell Scenario

Scenario No. 1: I plan to sell the pound today after a breakout below the 1.3334 level (red line on the chart), which will lead to a quick drop in the pair. The key target for sellers will be the 1.3288 level, where I plan to exit short positions and immediately open long positions in the opposite direction (expecting a move of 20–25 pips up from the level). Selling the pound today is possible following the release of weak data.

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

Scenario No. 2: I also plan to sell the pound today in case of two consecutive tests of the 1.3369 price level at a moment when the MACD indicator is in the overbought zone. This will limit the pair's upside potential and lead to a market reversal downward. A decline toward the opposite levels of 1.3334 and 1.3268 can 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.