Trade Review and Advice for Trading the British Pound

The test of the 1.3394 price level in the first half of the day coincided with the MACD indicator just beginning to move down from the zero line, confirming the accuracy of the trend-based sell entry. However, the pair did not experience a significant decline.

Market participants are hoping for a more cautious stance from the Bank of England regarding interest rates and inflation. This expectation is likely driven by growing concerns about a potential resurgence in inflation. A more aggressive approach to rate policy could result in a stronger upward move in the pound. Unfortunately, apart from the Bank of England's decision, there are no other fundamental statistics today. This shifts the focus to the UK, where any statement by central bank officials regarding monetary policy could cause significant volatility in the pound. The market is on hold, waiting for signals to gauge how determined the regulator is in combating inflation and what trade-offs in economic growth they are willing to accept.

As for the intraday strategy, I will focus on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1:I plan to buy the pound today upon reaching the entry point around 1.3439 (green line on the chart), with a target of rising to 1.3480 (thicker green line on the chart). Around 1.3480, I will exit long positions and open short positions in the opposite direction, aiming for a 30–35 point move from the level. Any rise in the pound today will likely be limited to a corrective move. Important! Before buying, make sure that the MACD indicator is above the zero line and just beginning to rise.

Scenario #2:I also plan to buy the pound today if there are two consecutive tests of the 1.3394 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal upward. A rise toward 1.3439 and 1.3480 can be expected.

Sell Signal

Scenario #1:I plan to sell the pound today after a breakout below 1.3394 (red line on the chart), which would likely lead to a sharp drop in the pair. The key target for sellers will be 1.3353, where I will exit short positions and open immediate long positions in the opposite direction, aiming for a 20–25 point move from the level. Sellers will gain control if the Bank of England adopts a dovish stance.Important! Before selling, make sure that the MACD indicator is below the zero line and just beginning to decline.

Scenario #2:I also plan to sell the pound today if there are two consecutive tests of the 1.3439 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and trigger a downward reversal. A decline toward 1.3394 and 1.3353 can be expected.

Chart Guide:

• Thin green line – Entry price for long positions
• Thick green line – Approximate price to set Take Profit or manually fix profits, as further growth is unlikely above this level
• Thin red line – Entry price for short positions
• Thick red line – Approximate price to set Take Profit or manually fix profits, as further decline is unlikely below this level
• MACD Indicator – It's important to consider overbought and oversold zones when entering the market

Important:Beginner Forex traders should be very cautious when making market entry decisions. It's best to stay out of the market before the release of important fundamental reports to avoid sharp price swings. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you may quickly lose your entire deposit, especially if you don't apply money management and trade with large volumes.

And remember, successful trading requires a clear plan, like the one presented above. Spontaneous decisions based on current market movements are a losing strategy for intraday traders.