Analysis of Trades and Trading Tips for the British Pound

The test of the 1.2490 price level in the second half of the day aligned with the MACD indicator beginning its downward movement from the zero mark. This provided a valid entry point to sell the pound, resulting in a 20-pip decline.

Earlier, strong data from the U.S. real estate market significantly influenced the British pound. Additionally, statements from Trump regarding trade tariffs further strengthened the dollar's position, leading to a notable sell-off in GBP/USD during today's Asian session. The increasing interest in the dollar is also fueled by expectations that the Federal Reserve will keep interest rates unchanged. With the Fed's decision announcement scheduled for tomorrow, demand for risk assets is unlikely to recover in the near term.

The lack of fresh fundamental data from the UK may create uncertainty in the currency market. Investors and traders depend on reliable data to make informed forecasts. Without such data, markets might react to rumors and speculation, increasing volatility. Consequently, the British pound could be at a disadvantage against the U.S. dollar due to these fundamental pressures.

For my intraday strategies, I plan to focus mainly on Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound upon reaching the entry point around 1.2465 (green line on the chart) with a target of rising to the 1.2525 level (thicker green line on the chart). Around 1.2525, I will exit my buy positions and open sell trades in the opposite direction (anticipating a 30–35 pips movement from the level). A significant rise in the pound is unlikely in the near term. Important! Before buying, ensure that the MACD indicator is above the zero mark and starting to rise.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.2431 price level, provided that the MACD indicator is in the oversold zone. This will limit the pair's downside potential and lead to an upward market reversal. Growth can be expected toward the opposite levels of 1.2465 and 1.2525.

Sell Signal

Scenario #1: I plan to sell the pound today after breaking below the 1.2431 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 1.2379 level, where I plan to exit the market and immediately open buy positions in the opposite direction (anticipating a movement of 20–25 pips from the level). Selling the pound at higher levels is better, as trading will be against the trend. Important! Before selling, ensure that the MACD indicator is below the zero mark and starting to decline.

Scenario #2: I also plan to sell the pound today if the MACD indicator is in the overbought zone and the price level of 1.2465 is tested twice consecutively. This will limit the pair's upward potential and lead to a market reversal downward. A decline can be expected toward the opposite levels of 1.2431 and 1.2379.

Chart Notes

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
• MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Note for Beginner Traders

• Always approach market entry decisions cautiously.
• Avoid trading during major news releases to sidestep volatile price swings.
• If trading during news releases, always set stop-loss orders to minimize losses.
• Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
• A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.