Analysis of Trades and Trading Advice for the British Pound

The test of the 1.3497 price level occurred when the MACD indicator was just beginning to move downward from the zero line, confirming the validity of the entry point for a short position on the pound. As a result, the pair declined by more than 20 points.

The U.S. currency remains in demand amid growing expectations regarding the interest rate, and on Wednesday, I expect the Fed to increase borrowing costs for the first time in three years. For Donald Trump, this decision will be an unfavorable development, but the latest data effectively leave the regulator with no alternative. In this situation, the pound is largely dependent on external factors. Without signals from the Bank of England that are comparable in significance, GBP/USD will, in my view, continue to move primarily in line with developments surrounding the dollar rather than the domestic UK agenda. For this reason, the Fed's decision on Wednesday could have a stronger influence on the pair's direction than any local UK economic data released this week.

No significant U.S. economic indicators will be released in the second half of today, which may allow the market to partially reverse the dollar's morning gains, providing modest support for risk assets. However, I believe the potential for such a correction will be limited: the latest inflation data have significantly strengthened expectations of a Fed rate hike, while the fundamental backdrop continues to argue against a deeper correction. In this situation, the pound remains largely dependent on external market factors.

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

Buy Signal

Scenario No. 1: Today, I plan to buy the pound when the entry point is reached around 1.3492 (the green line on the chart), with a target of rising to 1.3515 (the thicker green line on the chart). Around 1.3515, I will close the long position and open a short position in the opposite direction, targeting a 30–35-point move from the level. Any rise in the pound today should be viewed only as a correction. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today if there are two consecutive tests of the 1.3478 price level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward reversal. A rise toward the opposite levels of 1.3492 and 1.3515 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after the 1.3478 level is broken (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 1.3454, where I will close the short position and immediately open a long position in the opposite direction, targeting a 20–25-point move from the level. Strong downside pressure on the pound may return at any time. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of the 1.3492 price level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.3478 and 1.3454 can be expected.

What Is Shown on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated price at which Take Profit can be placed or profit can be taken manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated price at which Take Profit can be placed or profit can be taken manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold areas into account.

Important. Beginner Forex traders should be very cautious when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid exposure to sharp exchange-rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire trading account very quickly, especially if you do not use money management and trade with large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making trading decisions spontaneously based on the current market situation is an inherently losing strategy for an intraday trader.