Trade review and tips for trading the British pound

The test of the 1.3508 level occurred when the MACD indicator had just started moving downward from the zero line, confirming a valid entry point for selling the pound. As a result, the pair declined toward the target level of 1.3486.

Sellers of the pound acted quite aggressively, and several active attempts by buyers to defend the 1.3500 level quickly failed. Technical analysis shows that the bullish sentiment that dominated the market last week has started to weaken. Short-term prospects for the pound also remain unimpressive unless there is a significant shift in market sentiment due to geopolitics.

Further direction of GBP/USD will depend on US data on consumer confidence and the housing price index. The consumer confidence indicator, which reflects US household sentiment, serves as a barometer of economic conditions. High values of this indicator usually signal strong consumer demand, which may put pressure on the pair. Similarly, the housing price index will provide valuable information about the US real estate market, one of the pillars of the economy. Rising housing prices are generally associated with positive economic trends, while stagnation or decline may indicate potential problems. The combination of these geopolitical and macroeconomic factors will allow traders to form a clearer view of the near-term outlook for the dollar against the pound.

As for the intraday strategy, I will primarily rely on the implementation of Scenario #1 and Scenario #2.

Buy signal

Scenario #1: Today I plan to buy the pound upon reaching the entry point around 1.3501 (green line on the chart), with a target of 1.3530 (thicker green line on the chart). At 1.3530, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move from the level). Further pound growth today can only be expected after positive news from the Middle East. Important! Before buying, make sure 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 today in the case of two consecutive tests of 1.3483 when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 1.3501 and 1.3530 can be expected.

Sell signal

Scenario #1: I plan to sell the pound after a break below the 1.3483 level (red line on the chart), which would lead to a quick decline in the pair. The key target for sellers will be 1.3443, where I will exit short positions and immediately open buy positions in the opposite direction (expecting a 20–25 point move back). Pressure on the pound today may return in the event of a firm stance by the US and Iran. Important! Before selling, make sure that the MACD indicator is below the zero line and has just started declining from it.

Scenario #2: I also plan to sell the pound today in the case of two consecutive tests of 1.3501 when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.3483 and 1.3443 can be expected.

On the chart:

• Thin green line – entry price for buying the instrument;
• Thick green line – estimated level to place Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – estimated level to place Take Profit or manually secure profits, 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 make market entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. 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 money management and trade large volumes.

And remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are an inherently losing strategy for an intraday trader.