Trade Review and Advice on Trading the British Pound

The test of the 1.3528 price occurred when the MACD indicator had already moved well below the zero line, which limited the pair's downside potential. For this reason, I did not sell the pound.

The British pound rose against the dollar after last Friday's data showed a decline in the University of Michigan Consumer Sentiment Index. The unexpected drop in the index weakened the dollar and provided a boost for the pound. Markets reacted immediately, as investors revised their expectations towards a more dovish Federal Reserve policy.

No major fundamental data are expected from the UK today, which is likely positive for the pound. The absence of macroeconomic releases from the United Kingdom allows the market to focus on other factors influencing the pair's dynamics. This, in turn, reduces the likelihood of sharp fluctuations caused by unexpected data. With the prevailing upward trend, a neutral news background may support further strengthening of the pound, as speculative positions aimed at growth remain a priority.

Market participants are likely to focus on news from the US and global trends influencing risk appetite. Any negative signals from the US economy or increasing geopolitical tensions could increase the pound's attractiveness.

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 at around 1.3573 (green line on the chart) is reached, aiming for growth to 1.3608 (thicker green line on the chart). Around 1.3608, I plan to exit longs and open shorts in the opposite direction (expecting a 30–35 pip retracement from the level). Strong growth in the pound can be expected if the uptrend continues. Important! Before buying, ensure the MACD indicator is above the zero line and is just starting to rise from it.

Scenario #2: I also plan to buy the pound if there are two consecutive tests of the 1.3557 level while the MACD indicator is in the oversold area. This will limit the pair's downside potential and cause a reversal upward. Growth to the opposite levels of 1.3573 and 1.3608 can be expected.

Sell Scenario

Scenario #1: I plan to sell the pound today after a break below 1.3557 (red line on the chart), which should quickly send the pair lower. The main seller's target will be 1.3526, where I'll exit shorts and consider immediately opening longs in the opposite direction (expecting a 20–25 pip retracement from the level). Pound sellers could become active at any moment today. Important! Before selling, ensure the MACD indicator is below the zero line and is just starting to fall from it.

Scenario #2: I also plan to sell the pound if there are two consecutive tests of the 1.3573 level while the MACD indicator is in the overbought area. This limits the pair's upside potential and triggers a reversal down. A decline to the opposite levels of 1.3557 and 1.3526 can be expected.

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.