Trade Review and Tips for Trading the British Pound

The test of the 1.3375 level occurred when the MACD indicator had just started moving upward from the zero line, confirming a correct entry point for buying the pound. As a result, the pair rose by more than 20 points.

The second half of the day in financial markets promises to be active, as traders will focus on several key macroeconomic indicators from the United States. Of particular interest will be the initial jobless claims data. This weekly indicator is one of the most timely measures of the condition of the U.S. labor market. Its dynamics can signal either a slowdown or acceleration in economic growth and directly influence expectations regarding Federal Reserve policy.

Another important release will be the trade balance data. Changes in the trade balance may reflect the competitiveness of domestic producers in the global market and can also influence the exchange rate of the national currency.

At the same time, data on building permits issued and housing starts will also be published. High construction activity usually indicates growing confidence among businesses and consumers in economic prospects and tends to support the U.S. dollar.

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

Buy Signal

Scenario No. 1

Today I plan to buy the pound when the price reaches the entry point around 1.3395 (green line on the chart), targeting a rise to 1.3420 (thicker green line on the chart). Near 1.3420, I plan to exit buy positions and open sell positions in the opposite direction, expecting a 30–35 point move downward from that level. A rise in the pound can be expected today if U.S. economic data comes out weaker than expected.

Important: Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario No. 2

I also plan to buy the pound if there are two consecutive tests of the 1.3380 level while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and lead to a market reversal upward. In this case, growth toward 1.3395 and 1.3420 can be expected.

Sell Signal

Scenario No. 1

I plan to sell the pound after a break of the 1.3380 level (red line on the chart), which could trigger a rapid decline in the pair. The key target for sellers will be 1.3355, where I plan to close sell positions and also open buy positions in the opposite direction, expecting a 20–25 point rebound. Pressure on the pound could return at any moment.

Important: Before selling, make sure the MACD indicator is below the zero line and just starting to move downward.

Scenario No. 2

I also plan to sell the pound if there are two consecutive tests of the 1.3395 level while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and could lead to a downward market reversal. In this case, a decline toward 1.3380 and 1.3355 can be expected.

What the Chart Shows

• Thin green line – entry price where the instrument can be bought.
• Thick green line – estimated level where Take Profit can be set or profits can be taken manually, as further growth above this level is unlikely.
• Thin red line – entry price where the instrument can be sold.
• Thick red line – estimated level where Take Profit can be set or profits can be taken manually, as further decline below this level is unlikely.
• MACD indicator – when entering the market, it is important to consider the overbought and oversold zones.

Important

Beginner traders in the Forex market should make entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations.

If you decide to trade during news releases, always place stop-loss orders to minimize potential losses. Without stop-loss orders, you may lose your entire deposit very quickly, especially if you do not use proper money management and trade with large volumes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Making spontaneous trading decisions based solely on the current market situation is generally a losing strategy for an intraday trader.