Trade Review and GBP Trading Strategy

The test of the 1.3559 level in the first half of the day occurred when the MACD indicator had just started moving downward from the zero mark, confirming the correct market entry point. As a result, the pound declined by 15 points, and that was the extent of the move.

During the U.S. trading session, several key economic reports are expected, including U.S. retail sales, industrial production, and manufacturing output. These releases are likely to spark volatility in the GBP/USD pair. Market participants—both investors and traders—will closely analyze these macroeconomic indicators, as they can provide insight into the current state of the U.S. economy and offer clues about the Federal Reserve's next steps.

Retail sales are a crucial indicator of consumer spending, which makes up a significant share of U.S. GDP. An increase in retail sales reflects economic resilience and consumer confidence, generally supporting the U.S. dollar. Industrial production and manufacturing output are also vital indicators of economic health. Growth in these areas points to stronger manufacturing activity and may signal economic expansion.

Intraday Strategy

Today, I will focus on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today on a move to the 1.3579 level (green line on the chart) with a target at 1.3634 (thicker green line). Around 1.3634, I will exit long positions and open short ones, anticipating a 30–35 point retracement from this level. GBP growth today will likely depend on weak U.S. data. Important: Before buying, make sure the MACD indicator is above the zero line and just beginning to rise.

Scenario #2: I also plan to buy GBP today in case of two consecutive tests of the 1.3554 level while the MACD is in the oversold zone. This setup will limit the pair's downward potential and trigger a reversal upward. Growth to 1.3579 and 1.3634 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound after a drop to the 1.3554 level (red line on the chart), which could lead to a quick decline in the pair. The primary target for sellers will be 1.3511, where I'll exit short positions and immediately open long ones, aiming for a 20–25 point rebound. Sellers are likely to step in following strong U.S. data. Important: Before selling, ensure the MACD indicator is below the zero line and just starting to fall.

Scenario #2: I also plan to sell GBP in case of two consecutive tests of the 1.3579 level while the MACD is in the overbought zone. This will cap the upward potential and trigger a downward reversal. A drop toward 1.3554 and 1.3511 is likely.

Chart Legend:

• Thin green line – entry price for buying the trading instrument
• Thick green line – suggested take-profit level or a point to manually lock in profits, as further growth above this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – suggested take-profit level or a point to manually lock in profits, as further decline below this level is unlikely
• MACD Indicator – use overbought/oversold conditions to time market entries

Important Note for Beginner Traders:

Beginner Forex traders must approach market entry decisions with great caution. It is best to stay out of the market before the release of significant fundamental reports to avoid sudden price swings. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Trading without stop-losses can quickly drain your account, especially if you're not practicing money management and trading large volumes.

Remember: successful trading requires a clear and structured plan like the one provided above. Spontaneous decisions based on market conditions are generally a losing strategy for intraday traders.