Trade Review and Trading Advice for the British Pound

The price test at 1.3193 occurred at a time when the MACD indicator had just started moving downward from the zero line, which confirmed a correct entry point for selling the pound. However, the trade resulted in a loss, as no downward movement followed.

Today is expected to be an active day for financial markets, as investors will closely monitor the release of key U.S. economic data. The trade balance report on goods is expected to provide insight into the current state of the country's external trade. However, the more important release will be the University of Michigan Consumer Sentiment Index. This indicator is a leading measure reflecting Americans' confidence in their financial situation and the overall state of the economy. High readings are traditionally associated with rising consumer spending, which supports economic growth. A decline, on the other hand, may signal an upcoming slowdown.

Finally, speeches by FOMC members John Williams and Neel Kashkari will serve as an additional source of information. Such statements often contain hints about the regulator's future monetary policy intentions. A hawkish stance from policymakers would support the dollar and put pressure on the pound.

As for the intraday strategy, I will continue to rely mainly on scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy the pound at an entry point around 1.3231 (green line on the chart), targeting a rise toward 1.3270 (thicker green line on the chart). At 1.3270, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point reversal from that level). A strong rally in the pound today is unlikely. Important: before buying, ensure that the MACD indicator is above the zero line and has just started rising from it.

Scenario No. 2: I will also consider buying the pound if the price tests 1.3208 twice in a row while the MACD indicator is in oversold territory. This would limit downward potential and trigger a reversal to the upside. A move toward the opposite levels at 1.3231 and 1.3270 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound after a break below the 1.3208 level (red line on the chart), which may lead to a sharp decline. The key target for sellers is 1.3165, where I will exit short positions and open long positions in the opposite direction (expecting a 20–25 point rebound). Downward pressure on the pound may return in the event of hawkish comments from the Federal Reserve. Important: before selling, ensure that the MACD indicator is below the zero line and has just started moving downward from it.

Scenario No. 2: I will also consider selling the pound if the price tests 1.3231 twice in a row while the MACD indicator is in overbought territory. This would limit upward potential and lead to a downward reversal. A decline toward the opposite levels at 1.3208 and 1.3165 can be expected.

What is shown on the chart:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – projected price level for Take Profit or manual profit-taking, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – projected price level for Take Profit or manual profit-taking, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important: Beginner Forex traders should be very cautious when making trading decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price volatility. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can quickly lose your entire deposit, especially if you do not use proper risk management and trade with large volumes.

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