Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3733 level occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upside potential. For this reason, I did not buy the pound. The second test of 1.3733 happened when the MACD was in the overbought area, which enabled the implementation of Sell Scenario #2. However, the pair ultimately did not decline.

The final Q1 data, revised downward, confirmed a U.S. GDP contraction of 0.5%, compared to the preliminary figure of 0.2%. This negative surprise exerted noticeable pressure on the U.S. dollar, increasing interest in alternative currencies—particularly the British pound. Investors, concerned by the slowdown in the U.S. economy, revised their expectations for future Federal Reserve policy. Rising expectations of further rate cuts reduced the dollar's appeal as a safe-haven asset.

There are no UK economic data releases today. The lack of fresh economic figures from the United Kingdom may leave the pound without support, making it vulnerable to speculative pressure and overall market pessimism. In uncertain conditions, traders often prefer to lock in profits, which could lead to a moderate decline in the pound's rate. However, it is worth noting that the fundamental factors influencing the pound remain unchanged. Inflation in the UK remains high, putting pressure on the Bank of England to proceed cautiously with interest rate cuts. This, in turn, supports demand for the pound in the long term.

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

Buy Scenario

Scenario #1: Today, I plan to buy the pound at an entry point of around 1.3750 (indicated by the green line on the chart), targeting a rise to 1.3799 (represented by the thicker green line). Near 1.3799, I intend to close the long position and open a short position in the opposite direction (anticipating a 30–35 pip pullback from that level). A bullish outlook on the pound today aligns with the ongoing uptrend.

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

Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the 1.3714 level while the MACD indicator is in the oversold zone. This will limit the pair's downside potential and trigger a reversal to the upside. A rise to the opposing levels of 1.3750 and 1.3799 can be expected.

Sell Scenario

Scenario #1: I plan to sell the pound today after a break below 1.3714 (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be 1.3664, where I intend to close the short position and immediately open a long position (anticipating a 20–25 pip pullback). Selling the pound is appropriate after a failed attempt to rise above the daily high.

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

Scenario #2: I also plan to sell the pound in case of two consecutive tests of the 1.3750 level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and may trigger a downward reversal. A decline toward 1.3714 and 1.3664 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.