Trade Review and Advice for Trading the British Pound

The test of the 1.3543 level occurred when the MACD indicator had just begun moving upward from the zero mark, confirming a valid entry point for buying the pound. As a result, the pair gained 20 points.

The pound reacted with a temporary decline following weak retail sales data from the Confederation of British Industry. The release of the report, showing a contraction in retail volumes in the United Kingdom, led to a predictable drop in demand for the British currency. Investors and traders interpreted this as confirmation of slowing consumer activity—one of the key indicators of economic health. However, the expected sharp drop in the pound did not occur. This may suggest that the market had already priced in weak data. It is also possible that market participants are factoring in upcoming political events, expected changes in the Bank of England's monetary policy, or are simply waiting for stronger catalysts to trigger a sell-off.

Given that there is no U.S. data scheduled for the second half of the day, the outlook for pound buying can change at any moment. Traders should avoid large positions and be prepared for sharp moves that may contradict the main trend.

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

Buy Signal

Scenario No. 1: I plan to buy the pound today upon reaching the entry point around 1.3572 (green line on the chart), targeting a move to 1.3597 (thicker green line on the chart). Around 1.3597, I plan to exit long positions and open shorts in the opposite direction (expecting a 30–35 point move). Further pound gains today can be expected only if there is positive news from the Middle East.

Important: Before buying, make sure that the MACD indicator is above the zero mark and just starting to rise from it.

Scenario No. 2: I also plan to buy the pound if there are two consecutive tests of the 1.3547 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger an upward reversal. A move toward 1.3572 and 1.3597 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound after a break below 1.3547 (red line on the chart), which could lead to a rapid decline. The key target for sellers will be 1.3516, where I intend to exit short positions and immediately open longs in the opposite direction (expecting a 20–25 point move). Pressure on the pound will return today if the U.S. and Iran take a hardline stance.

Important: Before selling, make sure that the MACD indicator is below the zero mark and just beginning to decline.

Scenario No. 2: I also plan to sell the pound if there are two consecutive tests of the 1.3572 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline toward 1.3547 and 1.3516 can be expected.

Chart Explanation

• Thin green line – entry price for buying the instrument
• Thick green line – estimated level to place Take Profit or manually lock in 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 lock in profits, as further decline below this level is unlikely
• MACD indicator – when entering the market, pay attention to overbought and oversold zones

Important: Beginner Forex traders must be extremely cautious when making entry decisions. It is best to stay out of the market before major fundamental releases to avoid sharp price swings. If you choose to trade during news releases, always place stop-loss orders to minimize potential losses.

Without stop-losses, you can quickly lose your entire deposit—especially if you trade large volumes without proper money management.

Remember, successful trading requires a clear trading plan, like the one outlined above. Spontaneous decisions based on current market conditions are an inherently losing strategy for an intraday trader.