Trade Review and Advice on Trading the British Pound

The test of 1.3660 occurred when the MACD indicator had already moved far above the zero line, which limited the pair's upside potential. For this reason, I did not buy the pound.

The Fed's decision to cut rates initially strengthened the pound, but demand for the dollar quickly returned. The market had expected more decisive action from the regulator, possibly clearer signals of further rate cuts in the near future. The absence of such guidance triggered a reassessment of risks and a return to more conservative strategies. The dollar, as a traditional safe-haven asset, once again drew investor interest amid concerns about global economic growth prospects.

Today, in the first half of the day, the Bank of England's decision on the key interest rate and the monetary policy statement will be released. The central bank's likely maintenance of the current stance is unlikely to provide significant support for the pound.

Ongoing concerns about the state of the British economy continue to weigh on the national currency. Most experts believe the central bank will leave the rate unchanged due to persistent risks. Market reaction, however, will depend on the BoE's rhetoric. If it expresses concern about inflation and signals readiness for a prolonged wait-and-see stance, the pound may receive temporary support. Otherwise, if the Bank takes no measures and provides no forward guidance, pressure on the pound could intensify.

As for the intraday strategy, I will focus more on implementing scenarios #1 and #2.

Buy Scenario

Scenario #1: I plan to buy the pound today if the entry point around 1.3611 (green line on the chart) is reached, targeting 1.3667 (thicker green line). At 1.3667, I intend to exit longs and immediately open shorts in the opposite direction, aiming for a 30–35 pip pullback. A strong continuation of pound growth can be expected only in line with the ongoing upward trend. Important: Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2: I also plan to buy the pound if the price tests 1.3578 twice in a row while the MACD is in oversold territory. This will limit the downside potential and trigger an upward reversal. Targets will be 1.3611 and 1.3667.

Sell Scenario

Scenario #1: I plan to sell the pound after breaking below 1.3578 (red line on the chart), which should lead to a rapid decline. The key target for sellers will be 1.3524, where I intend to exit shorts and immediately open longs in the opposite direction, aiming for a 20–25 pip rebound. Sellers will step in if the BoE takes a very dovish stance. Important: Before selling, make sure the MACD indicator is below the zero line and just starting to decline from it.

Scenario #2: I also plan to sell the pound if the price tests 1.3611 twice in a row while the MACD is in overbought territory. This will cap the upside potential and trigger a reversal downward—expected targets: 1.3578 and 1.3524.

What's on the Chart:

Thin green line – entry price at which the instrument can be bought.

Thick green line – suggested price for taking profit or manually securing profits, as further growth above this level is unlikely.

Thin red line – entry price at which the instrument can be sold.

Thick red line – suggested price for taking profit or manually securing profits, as further decline below this level is unlikely.

MACD indicator: When entering the market, it is important to refer to overbought and oversold areas.

Important. Beginner forex traders should exercise extreme caution when making entry decisions. Before important fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during the release of news, always use stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes. And remember: for successful trading, you need a clear trading plan, as I described above. Making spontaneous trading decisions based on the current market situation from moment to moment is a losing strategy for an intraday trader.