Analysis of Trades and Trading Tips for the British Pound

The price test at 1.2907 occurred when the MACD indicator had already moved significantly below the zero line, limiting the pair's downside potential. For that reason, I did not sell the pound. A second test of 1.2907, with the MACD in the oversold zone, triggered Scenario #2 for buying the pound, but the pair failed to rise afterward, resulting in a loss being locked in.

Weak U.S. Manufacturing PMI data limited the downside potential for the British pound only by the mid-U.S. session. It's clear that today, traders will act cautiously, awaiting further economic signals that could shed light on the interest rate outlooks for both the Federal Reserve and the Bank of England. Despite some volatility, the pound continues to demonstrate resilience. Today, in the absence of UK news, market participants will closely monitor the political landscape, which now entirely hinges on the U.S. tariff decisions.

For intraday strategy, I will focus primarily on Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today at the entry point near 1.2929 (green line on the chart), targeting a rise to 1.2980 (thicker green line). Around 1.2980, I plan to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip pullback). Buying the pound makes sense only as part of a minor correction within the channel. Important: Before buying, ensure the MACD is above the zero line and beginning to rise.

Scenario #2: I will also consider buying the pound after two consecutive tests of 1.2905 when the MACD is in oversold territory. This would limit the pair's downside and trigger a bullish reversal. A rise toward 1.2929 and 1.2980 could then be expected.

Sell Signal

Scenario #1: I plan to sell the pound after it breaks below 1.2905 (red line on the chart), which could lead to a swift decline in the pair. The main target for sellers will be 1.2859, where I plan to exit short positions and open immediate long positions (expecting a 20–25 pip rebound). Important: Before selling, ensure the MACD is below the zero line and starting to fall from it.

Scenario #2: I will also consider selling the pound after two consecutive tests of 1.2929 when the MACD is in the overbought zone. This would limit the upside potential and trigger a bearish reversal. A decline toward 1.2905 and 1.2859 may follow.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.