Analysis of Trades and Tips for Trading the British Pound

The price test at 1.3567 during the first half of the day occurred when the MACD indicator had already moved significantly above the zero line, limiting the pair's upward potential. For this reason, I did not buy the pound. The second test shortly afterward provided a reason to sell the pound under Scenario #2, but no major decline followed.

Ahead are the U.S. wholesale inventory data, which usually have little impact on currency market dynamics. Thus, it's better to focus on the China-U.S. trade negotiations. Generally, wholesale inventory data do not provoke strong reactions in the forex market. However, in the current macroeconomic context, where investors are extremely sensitive to any signals indicating a slowdown in U.S. economic growth, even minor indicators can gain importance.

The main focus, however, remains on the negotiations between Chinese and U.S. representatives. The outcome of these talks will have far-reaching consequences for the global economy and financial markets. Any positive developments indicating the possibility of a trade agreement will undoubtedly spark a rally in the U.S. dollar. Conversely, a breakdown in negotiations or an escalation in trade tensions would trigger a flight from the dollar into the British pound and other assets.

As for intraday strategy, I will mainly rely on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound if the price reaches around 1.3582 (green line on the chart) with a target of 1.3607 (thicker green line on the chart). At 1.3607, I plan to exit the long position and open a short in the opposite direction, aiming for a 30–35 point movement from the entry point. A rise in the pound today can be expected after weak or failed negotiations.Important! Before buying, make sure the MACD indicator is above the zero line and just beginning to rise from it.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.3562 level when the MACD is in the oversold area. This will limit the downward potential and lead to a reversal upwards. A rise to 1.3582 and 1.3607 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound after it breaks below 1.3562 (red line on the chart), which will likely lead to a quick decline. The primary target for sellers will be 1.3538, where I plan to exit the short position and immediately open a buy position in the opposite direction, aiming for a 20–25 point move. Sellers are likely to show up in the case of strong U.S. data.Important! Before selling, make sure the MACD indicator is below the zero line and just beginning to fall from it.

Scenario #2: I also plan to sell the pound if there are two consecutive tests of the 1.3582 level when the MACD is in the overbought area. This will limit the upward potential and lead to a reversal downward. A decline to 1.3562 and 1.3538 can be expected.

Chart Notes:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – projected price to set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – projected price to set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator – It is important to rely on overbought and oversold zones when entering the market.

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

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