Trade Analysis and Tips for Trading the British Pound

The test of the price at 1.3118 occurred when the MACD indicator had significantly fallen from the zero mark, limiting the pair's downward potential. For this reason, I did not sell the pound.

Weak US manufacturing data for October supported the pound. This short-term spike was driven by hopes that a slowing US economy would compel the Federal Reserve to continue easing its monetary policy. However, fundamental factors that determine the British currency's trajectory, such as high inflation, recession risks, and uncertainty about fiscal policy, quickly brought the pound back down.

This morning, there are no economic reports from the UK, so all analysts' attention will be on Sarah Breeden's speech, a member of the Bank of England's Financial Stability Committee. Her statements regarding the reliability of the financial system and inflation expectations will be closely monitored by market participants for signals about the central bank's next steps. Given the recent volatility in financial markets and ongoing unpredictability regarding future interest rate changes, Breeden's speech could significantly impact the value of the British currency.

Regarding the intraday strategy, I will primarily rely on implementing Scenarios No. 1 and No. 2.

Buy Scenarios

• Scenario No. 1: I plan to buy the pound today when the price reaches the entry point around 1.3132 (green line on the chart), targeting a move to 1.3160 (thicker green line on the chart). Near 1.3160, I plan to exit my long positions and initiate shorts in the opposite direction (anticipating a movement of 30-35 pips back from this level). Growth in the pound today can only be anticipated within the context of a correction. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting an upward move.
• Scenario No. 2: I also plan to buy the pound today if there are two consecutive tests of 1.3116 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth can be expected towards the opposite levels of 1.3132 and 1.3160.

Sell Scenarios

• Scenario No. 1: I plan to sell the pound today after the 1.3116 level is updated (red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be the 1.3090 level, where I plan to exit my shorts and open immediate longs in the opposite direction (anticipating a move of 20-25 points back from this level). Pound sellers could return to the market at any moment. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning its downward movement.
• Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of 1.3132 when the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a market reversal downward. A decrease can be expected towards opposite levels of 1.3116 and 1.3090.

What the Chart Shows:

• Thin Green Line: Entry price at which to buy the trading instrument.
• Thick Green Line: Expected price level for setting Take Profit or manually securing profits, as further growth above this level is unlikely.
• Thin Red Line: Entry price at which to sell the trading instrument.
• Thick Red Line: Expected price level for setting Take Profit or manually securing profits, as further decline below this level is unlikely.
• MACD Indicator: When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner traders in the Forex market must exercise great caution when making trading decisions. Before the release of significant fundamental reports, it is best to stay out of the market to avoid getting caught in sharp price fluctuations. If you choose to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember, successful trading requires a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.