Analysis of trades and tips for trading the British pound

The test of the 1.3171 price level occurred when the MACD indicator had just started to move up from the zero mark, confirming a correct entry point for buying the pound. As a result, the pair rose by almost 40 points, reaching the target of 1.3207. The U.K. inflation data, which matched economists' forecasts, triggered the pound's rise, as the return of price pressure could be a problem for the Bank of England, which is planning further rate cuts at its next meeting. Ahead of us are figures on building permits and housing starts in the U.S., but these will likely be ignored as attention shifts to the FOMC's decision on the key interest rate. It is expected that rates will be cut by 0.25%, but there is also a chance of a more aggressive 0.5% cut. In such a case, the pound will continue to rise against the U.S. dollar. As for the intraday strategy, I plan to act based on the implementation of scenario #1, despite the MACD indicator readings, as I expect a strong and directional movement.

Buy Signal

Scenario #1: Today, I plan to buy the pound when the entry point around 1.3232 (green line on the chart) is reached, with a target of 1.3304 (thicker green line on the chart). At 1.3304, I will exit the long positions and open short positions in the opposite direction, aiming for a 30-35 point movement from the entry level. You can expect a rise in the pound today if U.S. rates are cut. Note: Before buying, make sure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.3189 price level when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. You can expect a rise to the levels of 1.3232 and 1.3304.

Sell Signal

Scenario #1: I plan to sell the pound today after the 1.3189 level (red line on the chart) is broken, which will lead to a quick decline in the pair. The key target for sellers will be 1.3101, where I will exit the short positions and immediately buy the pound in the opposite direction, aiming for a 20-25 point movement from the level. Sellers will become more active if the Fed takes a hawkish stance. Note: Before selling, make sure the MACD indicator is below the zero mark and just starting to fall from it.

Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.3232 price level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. You can expect a decline to the support levels of 1.3189 and 1.3101.

What's on the chart:

• Thin green line – the entry price for buying the pound.
• Thick green line – the estimated price where you can place Take Profit or manually fix profit, as further growth above this level is unlikely.
• Thin red line – the entry price for selling the pound.
• Thick red line – the estimated price where you can place Take Profit or manually fix profit, as further decline below this level is unlikely.
• MACD indicator: When entering the market, it's important to use overbought and oversold zones.

Important: Beginner forex traders should be very cautious when making decisions about entering the market. It's best to stay out of the market before major reports are released to avoid sharp price swings. If you decide 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're not using money management and trading with large volumes.

Keep in mind that successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are likely to result in losses for intraday traders.