Trade Analysis and Tips for Trading the British Pound

The test of the 1.3545 level occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. For this reason, I did not sell the pound and missed the entire downward move.

Statements by a representative of the Bank of England, as expected, led to a decline in the British pound. The market interpreted the new signals as confirmation of likely monetary easing, which traditionally has a negative impact on the national currency. Such expectations are supported by data pointing to a slowdown in the labor market and potential risks to the country's economic growth.

Investors will next turn their attention to U.S. labor market data, which remains under close scrutiny. The key event today will be the release of the weekly initial jobless claims report. These figures can provide valuable insight into the condition and momentum of the U.S. labor market. A decline in claims would indicate continued strength in the labor market, which could support expectations regarding future Federal Reserve monetary policy. At the same time, attention will be focused on a speech by FOMC member Michelle Bowman. She is one of the voting members of the Federal Open Market Committee, and her statements are often interpreted as an indicator of the Fed's next steps. Experienced market participants will carefully analyze every phrase, trying to catch any hints about future interest rate decisions.

As for the intraday strategy, I will rely more on implementing Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy the pound upon reaching the entry point around 1.3536 (green line on the chart), with a target at 1.3558 (thicker green line on the chart). Around 1.3558, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move in the opposite direction from that level). Pound growth today can be expected after a dovish Fed stance.Important: Before buying, make sure that the MACD indicator is above the zero line and just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today in the case of two consecutive tests of the 1.3519 level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 1.3536 and 1.3558 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after a breakout below the 1.3519 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be 1.3502, where I plan to exit short positions and immediately open long positions in the opposite direction (expecting a 20–25 point move in the opposite direction from that level). Pressure on the pound will return today in the case of hawkish comments and a lack of signals pointing to rate cuts.Important: Before selling, make sure that the MACD indicator is below the zero line and just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound today in the case of two consecutive tests of the 1.3536 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.3519 and 1.3502 can be expected.

What's on the Chart:

• Thin green line – entry price at which you can buy the trading instrument;
• Thick green line – estimated level where you can place Take Profit orders or manually lock in profits, as further growth above this level is unlikely;
• Thin red line – entry price at which you can sell the trading instrument;
• Thick red line – estimated level where you can place Take Profit orders or manually lock in profits, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to rely on overbought and oversold zones.

Important. Beginner Forex traders should be very cautious when making market entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can very quickly lose your entire deposit, especially if you do not 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 an intraday trader.