Review of Trades and Trading Tips for the British Pound

The test of the 1.3429 level occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential.

The absence of significant macroeconomic data from the United Kingdom during the first half of the trading session created a kind of vacuum that, as often happens, markets tend to fill with technical movements. The British pound lacked fundamental support, which acted as a catalyst for a downward correction.

During the second half of the day, the Empire State Manufacturing Index is scheduled for release. Compiled by the Federal Reserve Bank of New York, it serves as a measure of business activity in the state's manufacturing sector. Analysis of this indicator's performance, as well as any deviations from forecasts or previous readings, may influence the U.S. dollar.

Market participants will then closely examine U.S. industrial production data. An acceleration or slowdown in growth within this sector will serve as an indicator of the strength—or weakness—of the U.S. economy, which will be reflected in dollar valuations.

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

Buy Signal

Scenario No. 1: I plan to buy the pound today when the price reaches the entry point around 1.3435 (the green line on the chart), targeting a rise to 1.3471 (the thicker green line on the chart). Near 1.3471, I plan to exit long positions and open short positions in the opposite direction, targeting a 30–35 point move from that level. Further gains in the pound can be expected today only if U.S. data come in weaker than expected.

Important: Before buying, make sure that the MACD indicator is above the zero line and is just beginning to move higher from it.

Scenario No. 2: I also plan to buy the pound if the price tests 1.3415 twice consecutively while the MACD indicator is in oversold territory. This would limit the pair's downward potential and trigger a bullish market reversal. In this case, a rise toward the opposite levels of 1.3435 and 1.3471 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound after a break below the 1.3415 level (the red line on the chart), which could lead to a rapid decline in the pair. The key target for sellers will be 1.3381, where I plan to exit short positions and immediately open long positions in the opposite direction, targeting a 20–25 point rebound. Pressure on the pound is likely to return today if U.S. data come in significantly stronger than expected.

Important: Before selling, make sure that the MACD indicator is below the zero line and is just beginning to move lower from it.

Scenario No. 2: I also plan to sell the pound if the price tests 1.3435 twice consecutively while the MACD indicator is in overbought territory. This would limit the pair's upward potential and trigger a bearish market reversal. In this case, a decline toward the opposite levels of 1.3415 and 1.3381 can be expected.

Chart Notes:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated Take Profit level or an area where profits may be manually secured, as further growth above this level is considered unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated Take Profit level or an area where profits may be manually secured, as further decline below this level is considered unlikely;
• MACD indicator – when entering the market, it is important to take overbought and oversold zones into account.

Important: Beginner Forex traders should exercise extreme caution when making market entry decisions. It is often best to stay out of the market ahead of major fundamental releases 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 protection, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large position sizes.

Remember that successful trading requires a clear trading plan, such as the one outlined above. Spontaneous trading decisions based solely on current market conditions are generally a losing strategy for intraday traders.