Trade Review and Tips for Trading the British Pound

No tests of the key levels I indicated occurred in the first half of the day. The reason was low market volatility due to the absence of important fundamental data.

During the U.S. session, the pound may have a chance to rebound, as there are no scheduled economic releases aside from a speech by FOMC member John Williams. This creates a sort of vacuum in which any positive signals—even those indirectly related to the UK economy or future monetary policy by the Bank of England—may be received with enthusiasm by the market. Investors may also be looking to take profit before the end of the week following the recent pound decline, which could support its growth. However, it's worth noting that Williams's remarks may contain important clues about future Fed policy. If he adopts a hawkish tone, this could strengthen the dollar and pressure the pound.

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

Buy Signal

Scenario #1: I plan to buy the pound today upon reaching the entry point around 1.2947 (green line on the chart) with a target of 1.3004 (thicker green line on the chart). Around 1.3004, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point pullback from that level). Pound strength today can be expected within the framework of the current uptrend. Important: Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the 1.2913 level, when the MACD indicator is in oversold territory. This would limit the pair's downward potential and trigger a reversal. A rise toward the opposite levels of 1.2947 and 1.3004 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after a break below 1.2913 (red line on the chart), which would lead to a quick decline in the pair. The main target for sellers will be 1.2865, where I will exit short positions and open long positions in the opposite direction (expecting a 20–25 point upward rebound from that level). Sellers are likely to take action if U.S. data surprises to the upside. Important: Before selling, ensure that the MACD is below the zero line and just beginning to move downward.

Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.2947 level, while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a downward reversal. A decline toward 1.2913 and 1.2865 can be expected.

Chart Legend:

• Thin green line – entry price for long positions
• Thick green line – estimated level for Take Profit or manual profit-taking, as further growth above this level is unlikely
• Thin red line – entry price for short positions
• Thick red line – estimated level for Take Profit or manual profit-taking, as further decline below this level is unlikely
• MACD indicator – use overbought and oversold zones to guide entry decisions

Important: Beginner traders in the Forex market must exercise great caution when deciding to enter a trade. It is best to stay out of the market before major fundamental reports to avoid sharp price swings. If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without stops, your entire deposit could be wiped out quickly, especially if you're not applying money management and are trading with large positions.

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