Trade review and trading advice for the British pound

The price test at 1.3594 occurred at a moment when the MACD indicator had just started moving upward from the zero line, which confirmed a correct entry point for buying the pound. As a result, the pair rose toward the target level of 1.3622.

The British pound showed an impressive rise against the US dollar, benefiting from expectations of a significant geopolitical shift. News that the United States and Iran are approaching the signing of a ceasefire memorandum triggered a wave of optimism in global financial markets, and the British currency was among the main beneficiaries. Investors, previously restrained by tensions in the Middle East, are now reassessing their portfolios, anticipating stabilization and potential economic growth.

In the second half of the day, the main market driver is likely to be the release of the ADP employment change data in the United States. Positive data indicating strong job growth may reinforce expectations of sustained economic expansion and, as a result, support more "hawkish" sentiment among Federal Reserve officials in their fight against inflation. Conversely, weak data could raise concerns about an economic slowdown, which in turn may lead to a reassessment of monetary policy expectations.

Investors and analysts will also closely monitor speeches from Federal Reserve officials scheduled for today. Any references to inflation expectations, labor market conditions, or the overall economic outlook will be carefully analyzed.

Regarding intraday strategy, I will mainly rely on scenarios #1 and #2.

Buy signal

Scenario #1:

Today, I plan to buy the pound at an entry point around 1.3632 (green line on the chart) with a target of 1.3660 (thick green line on the chart). Around 1.3660, I will exit long positions and open short positions in the opposite direction, expecting a 30–35 pip reversal. Pound growth today is only possible after weak US data.Important: Before buying, ensure that the MACD indicator is above the zero line and has just started rising from it.

Scenario #2:

I also plan to buy the pound if there are two consecutive tests of 1.3611, while the MACD is in oversold territory. This would limit downward potential and lead to an upward reversal. A rise toward 1.3632 and 1.3660 can be expected.

Sell signal

Scenario #1:

I plan to sell the pound after a break below 1.3611 (red line on the chart), which may lead to a quick decline. The key target for sellers is 1.3585, where I will exit shorts and immediately open purchases in the opposite direction, expecting a 20–25 point reversal. Selling pressure may return today if US data is strong.Important: Before selling, ensure that the MACD is below the zero line and has just started declining from it.

Scenario #2:

I also plan to sell the pound if there are two consecutive tests of 1.3632 while the MACD is in overbought territory. This would limit upward potential and trigger a downward reversal. A decline toward 1.3611 and 1.3585 can be expected.

What is shown on the chart:

• Thin green line – entry price for buying the instrument
• Thick green line – target price (Take Profit level), where profits may be taken as further growth above this level is unlikely
• Thin red line – entry price for selling the instrument
• Thick red line – target price (Take Profit level), where profits may be taken as further decline below this level is unlikely
• MACD indicator – trading decisions should consider overbought and oversold zones

Important note

Beginner Forex traders should be very cautious when entering the market. Before major fundamental data releases, it is best to stay out of the market to avoid sharp volatility. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you may quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

And remember: successful trading requires a clear trading plan, similar to the one presented above. Making spontaneous trading decisions based on current market conditions is a losing intraday strategy from the outset.