Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3188 level occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. For this reason, I did not buy the pound.

From a fundamental perspective, buying the pound was also not justified, as retail sales data published by the Confederation of British Industry (CBI) showed a significant decline, coming in well below economists' expectations. According to the latest report, the indicator fell to -54 points, sending a concerning signal for the UK economy. Such a sharp decline in retail sales points to growing consumer pessimism and a potential slowdown in consumer activity.

The upcoming U.S. economic data releases will play an even greater role today in determining the direction of GBP/USD. Significant changes in U.S. GDP could signal continued economic expansion, exerting a noticeable influence on the investment climate and consumer confidence. However, particular attention will be paid to the Personal Consumption Expenditures (PCE) Price Index, which serves as the Federal Reserve's primary gauge of inflationary pressure. The reading of this indicator largely determines the future course of monetary policy. If the index points to accelerating inflation, it could prompt the Fed to tighten policy further, including raising interest rates. This, in turn, would support the U.S. dollar and put pressure on the pound.

As for my 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 upon reaching the entry point around 1.3175 (green line on the chart), targeting a rise to 1.3215 (the thicker green line on the chart). Around 1.3215, I plan to exit long positions and open short positions in the opposite direction, targeting a 30–35 point move from that level. A stronger advance in the pound can be expected today only if U.S. inflation shows a sharp decline.

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

Scenario No. 2: I also plan to buy the pound today if there are two consecutive tests of the 1.3154 level 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, growth toward the opposite levels of 1.3175 and 1.3215 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound today after a break below the 1.3154 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be 1.3114, where I plan to exit short positions and immediately consider opening long positions in the opposite direction, targeting a 20–25 point rebound. Pressure on the pound is likely to persist today if inflation rises.

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

Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of the 1.3175 level 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 1.3154 and 1.3114 can be expected.

Chart Notes:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated level where Take Profit orders may be placed or profits may be manually secured, 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 level where Take Profit orders may be placed or profits may be manually secured, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to use overbought and oversold zones as guidance.

Important. Beginner Forex traders should exercise extreme caution when making market entry decisions. It is best to stay out of the market ahead of major fundamental reports to avoid exposure to sharp price swings. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you trade large positions without applying proper money management.

Remember that successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based solely on the current market situation is inherently a losing strategy for an intraday trader.