Trade Analysis and Tips for Trading the British Pound

The test of the 1.3405 level occurred when the MACD indicator was just beginning to move higher from the zero line, confirming a valid entry point for buying the pound. As a result, the pair advanced by approximately 25 points.

The absence of UK economic data helped the pound regain lost ground. At the time of writing, GBP/USD was trading well above its daily low, having recovered most of the losses recorded earlier in the day. The lack of fresh macroeconomic releases allowed the market to focus on technical factors, where increased buying activity was observed.

In the second half of the day, important U.S. economic data is expected, which could have a significant impact on trader sentiment. Particular attention will be paid to U.S. building permits and housing starts. Given the current economic environment, where inflationary pressure remains elevated and the Federal Reserve continues to maintain high interest rates, these figures will be closely analyzed for clues regarding future monetary policy. Stronger data from the construction sector may strengthen the case for a more hawkish policy stance, while weaker figures could prompt a reassessment of monetary policy expectations.

As for the intraday strategy, I will primarily rely on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy the pound today upon reaching the entry point around 1.3434 (green line on the chart), with a target at 1.3468 (the thicker green line on the chart). Around 1.3468, I plan to exit long positions and open short positions in the opposite direction, targeting a 30–35 point move from the level. Further gains in the pound can be expected only if U.S. data comes in weak.

Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to move higher from it.

Scenario No. 2: I also plan to buy the pound today if the price tests the 1.3412 level twice consecutively while the MACD indicator is in oversold territory. This would limit the pair's downward potential and trigger an upward market reversal. In this case, a rise toward the opposite levels of 1.3434 and 1.3468 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound today after a break below the 1.3412 level (red line on the chart), which could trigger a rapid decline in the pair. The key target for sellers will be 1.3378, where I plan to exit short positions and immediately open long positions in the opposite direction, targeting a 20–25 point rebound. Pressure on the pound is likely to return if U.S. data comes in significantly stronger than expected.

Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to move lower from it.

Scenario No. 2: I also plan to sell the pound today if the price tests the 1.3434 level twice consecutively while the MACD indicator is in overbought territory. This would limit the pair's upward potential and trigger a downward market reversal. In this case, a decline toward the opposite levels of 1.3412 and 1.3378 can be expected.

Chart Notes:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated Take Profit level or an area where profits can be manually secured, as further gains above this level are unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated Take Profit level or an area where profits can be manually secured, as further declines below this level are unlikely;
• MACD Indicator – when entering the market, it is important to use overbought and oversold zones as guidance.

Important: Beginner Forex traders should exercise extreme caution when making market entry decisions. It is best to stay out of the market ahead of major fundamental reports to avoid sharp price fluctuations. If you choose to trade during news releases, always place stop-loss orders to minimize potential losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large position sizes.

Remember that successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based solely on current market conditions is inherently a losing strategy for an intraday trader.