Trade Review and Recommendations for Trading the British Pound

The test of the 1.3733 price level occurred when the MACD indicator had just started to move down from the zero mark. This confirmed a proper entry point for selling the pound and resulted in a drop of over 35 points.

The lack of economic data from the UK played into the hands of pound sellers, whose activity has persisted since yesterday's speech by Bank of England Governor Andrew Bailey. His comments on monetary policy, particularly the hints at a possible rate cut in August, exerted pressure on the British currency. Additionally, the broader macroeconomic picture — with signs of slowing economic growth in the UK — continues to weigh on sentiment. High inflation, despite policy efforts, still puts pressure on consumer demand.

During the U.S. session, strong ADP employment data from the U.S. is likely to push GBP/USD even lower. Investors closely watching macroeconomic data will interpret a significant upside surprise in employment as evidence of U.S. economic resilience and, consequently, dollar strength. From a technical standpoint, the setup also supports further short-term downside for GBP/USD.

As for the intraday strategy, I will mainly focus on executing Scenarios #1 and #2.

Buy Signal

Scenario #1:I plan to buy the pound today at the 1.3715 level (green line on the chart) with a target of 1.3734 (thicker green line). At 1.3734, I'll exit long positions and open a sell trade in the opposite direction, aiming for a 30–35 point pullback. A pound rebound is more likely if U.S. data disappoints.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 after two consecutive tests of the 1.3698 level, while the MACD is in the oversold zone. This will limit the downside and trigger a reversal. Growth toward the opposite levels of 1.3715 and 1.3734 can be expected.

Sell Signal

Scenario #1:I plan to sell the pound after a breakout below 1.3698 (red line on the chart), which could lead to a sharp decline. The sellers' main target will be 1.3674, where I'll exit short positions and open a long position in the opposite direction, aiming for a 20–25 point rebound. Sellers will dominate if U.S. data comes in strong.Important! Before selling, ensure the MACD indicator is below the zero line and just beginning to move downward.

Scenario #2:I also plan to sell the pound after two consecutive tests of the 1.3715 level, while the MACD is in the overbought zone. This will limit upward potential and trigger a reversal to the downside. A decline toward 1.3698 and 1.3674 can be expected.

Chart Legend:

• Thin green line – Entry price for buying the instrument
• Thick green line – Suggested Take Profit or manual exit price, as further growth beyond this level is unlikely
• Thin red line – Entry price for selling the instrument
• Thick red line – Suggested Take Profit or manual exit price, as further decline beyond this level is unlikely
• MACD Indicator – Entry decisions should be based on overbought and oversold zones

Important Note:Beginner traders in the Forex market should be extremely cautious when entering positions. It's best to stay out of the market before the release of major fundamental reports to avoid sudden price swings. If you choose to trade during news releases, always set stop-loss orders to limit potential losses. Without stop-losses, you risk quickly losing your entire deposit — especially if you're not practicing proper money management and are trading large volumes.

And remember, successful trading requires a clear trading plan, like the one outlined above. Making impulsive trading decisions based on current market moves is a losing strategy for intraday traders.