Trade Analysis and Tips for Trading the British Pound

Due to low market volatility, the price did not test the levels I outlined during the first half of the day.

Amid the absence of new macroeconomic data, the British pound showed relative stability, remaining within a narrow sideways range. Such consolidation, despite the relative calm, still maintains good prerequisites for potential growth in GBP/USD. In the second half of the day, the market may be influenced by U.S. retail sales data, as well as speeches by FOMC member Beth M. Hammack and FOMC member Lori K. Logan. Even individually, these two factors are capable of causing volatility.

Retail sales data, which serve as an indicator of consumer spending, are among the key measures of economic health. Strong figures may indicate economic resilience, which in turn could push the Federal Reserve toward a tighter monetary policy to combat inflation. Alongside the economic data, speeches by FOMC members Beth M. Hammack and Lori K. Logan will add weight to the overall picture. Traders and analysts will carefully scrutinize their remarks for any hints about the committee's future actions. Particular attention will be paid to comments on inflation, the labor market, and overall economic growth.

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

Buy Signal

Scenario No. 1: Today, I plan to buy the pound upon reaching the entry point around 1.3672 (green line on the chart), targeting a rise toward the 1.3700 level (the thicker green line on the chart). Around 1.3700, I will exit long positions and open short positions in the opposite direction (expecting a move of 30–35 points in the opposite direction from that level). A rise in the pound today can be expected after weak U.S. data.Important! Before buying, make sure that the MACD indicator is above the zero line and is 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 1.3648 price 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 1.3672 and 1.3700 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after a break below the 1.3648 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 1.3625 level, where I plan to exit short positions and also immediately open long positions in the opposite direction (expecting a move of 20–25 points in the opposite direction from that level). Pressure on the pound will return today in the case of strong data.Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to fall from it.

Scenario No. 2: I also plan to sell the pound today in the case of two consecutive tests of the 1.3672 price 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 1.3648 and 1.3625 can be expected.

What's on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated price where Take Profit orders can be placed or profits can be fixed manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated price where Take Profit orders can be placed or profits can be fixed manually, 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 extremely 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 fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use money management and trade large volumes.

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