Trade Review and Advice on Trading the British Pound

A test of the 1.3545 price level coincided with the MACD indicator just starting its move up from the zero line, confirming a good buy entry in GBP. However, the pair never developed a significant upward move.

The sharp 0.1% drop in US producer prices in August led to a dollar decline and a strengthening of the British pound. Still, a major bullish run did not materialize. First, the PPI drop was a one-off event, shifting the focus to today's US Consumer Price Index figures. Second, ongoing uncertainty over the British economy continued to weigh on sterling.

There are no UK data releases today, so most of the market movement will come after the US numbers are published. Until then, the pair may continue trading within yesterday's sideways channel. Intraday traders should diligently monitor news feeds, including not only economic, but also political and social events that may affect investor sentiment. While waiting for the US data release, a range-trading strategy seems reasonable, but remember the importance of stop-loss and take-profit orders—and prompt position adjustments as new information comes in.

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

Buy Scenario

• Scenario #1: Plan to buy GBP today at the entry area around 1.3531 (green line on the chart), targeting a rise to 1.3553 (thicker green line on the chart). Around 1.3553, I'll exit my longs and open a short for a move of 30–35 pips back in the opposite direction. A strong rally for GBP today is unlikely. Important: Before buying, make sure the MACD is above zero and just starting to rise from it.
• Scenario #2: Also plan to buy GBP if there are two consecutive tests of the 1.3518 level with the MACD indicator in the oversold area. This should limit the downside and lead to a reversal, targeting 1.3531 and 1.3553.

Sell Scenario

• Scenario #1: Plan to sell GBP today after a break below 1.3518 (red line on the chart), which should trigger a quick drop. The key target for sellers will be 1.3495, where I'll exit shorts and immediately look to buy for a 20–25 pip rebound. GBP sellers could become active at any time today. Important: Before selling, ensure the MACD is below zero and is just starting to fall.
• Scenario #2: Also plan to sell GBP if there are two consecutive tests of 1.3531 with the MACD in the overbought zone. This should cap the upside and prompt a reversal down, targeting 1.3518 and 1.3495.

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.