Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3630 level occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. A similar situation, but for a sell, occurred at the 1.3598 level.

The British pound rose against the dollar yesterday following Jerome Powell's remarks suggesting that positive data and favorable inflation numbers could allow for earlier rate cuts than currently expected. This prospect of monetary policy easing in the U.S. weakened the dollar's position and boosted other currencies, including the British pound. However, the market's enthusiasm for the sterling was restrained. Investors understand that the UK's economic situation remains challenging. In the near term, the dynamics of the GBP/USD pair will be shaped by U.S. data and domestic factors. Particular attention will be paid to UK inflation figures and comments from Bank of England officials.

Since no significant UK economic data is scheduled for release today, the market's focus will likely shift to the speech by BoE Deputy Governor for Monetary Policy Clare Lombardelli. Market participants will closely analyze her comments on the current state of the economy and the outlook for monetary policy, looking for clues about the BoE's future decisions. Lombardelli's speech could trigger volatility in the pound. This could support the British currency if she expresses concern about persistent inflation and hints at a continued wait-and-see approach. However, if her tone is more cautious, emphasizing risks to the economic recovery, the pound may come under downward pressure.

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

Buy Scenario

Scenario #1: I plan to buy the pound today upon reaching the entry point around 1.3636 (green line on the chart), targeting a rise to 1.3686 (thicker green line on the chart). Around 1.3686, I plan to exit long positions and open short positions in the opposite direction (aiming for a 30–35 pip pullback from the level). A rise in the pound today can be expected only after favorable statements.

Important: Before buying, ensure the MACD indicator is above the zero mark and beginning to rise.

Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the 1.3598 level while the MACD indicator is in the oversold zone. This will limit the pair's downside potential and lead to an upward reversal. A rise to the opposite levels of 1.3636 and 1.3686 can be expected.

Sell Scenario

Scenario #1: I plan to sell the pound today after the 1.3598 level (red line on the chart) is updated, which could trigger a quick decline in the pair. The key target for sellers will be the 1.3539 level, where I plan to exit short positions and open long positions in the opposite direction (expecting a 20–25 pip rebound from the level). Selling the pound is viable after negative statements.

Important: Before selling, ensure the MACD indicator is below the zero line and just beginning to decline.

Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the 1.3636 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline to the opposite levels of 1.3598 and 1.3539 can be expected.

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.