Trade Analysis and Tips for the British Pound

The test of the 1.3484 level occurred when the MACD indicator had just started to rise from the zero mark, confirming a valid entry point for buying the pound. However, a major upward movement did not follow.

It's worth noting that the pound has been declining daily for nearly a week, and a significant number of traders are betting on further weakening of the British currency against the U.S. dollar. This is due to growing market expectations of a more aggressive rate-cutting policy by the Bank of England. Such a trend is understandably concerning for pound holders. Seven consecutive days of decline signals a strong bearish trend that appears unlikely to ease. The underlying fundamentals suggest that pressure on the pound may persist in the short to medium term, with rising rate cut expectations from the Bank of England playing a key role.

In the second half of the day, the absence of U.S. economic data suggests lower volatility, though the overall downtrend in the pound is likely to continue.

As for the intraday strategy, I plan to focus on implementing scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today if the price reaches around 1.3494 (green line on the chart), targeting 1.3531 (thicker green line). At 1.3531, I will exit long positions and open short positions in the opposite direction, expecting a 30–35-point pullback. A significant rally in the pound is unlikely today. Important: Before buying, ensure that the MACD indicator is above the zero line and has just started to rise from it.

Scenario #2: I also plan to buy the pound if there are two consecutive tests of the 1.3475 level while the MACD is in the oversold zone. This will limit the downward potential and could trigger an upward reversal. Growth toward 1.3494 and 1.3531 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after the price breaks below 1.3475 (red line on the chart), which may lead to a quick decline. Sellers will target 1.3449, where I will exit short positions and open long positions in the opposite direction (expecting a 20–25-point move back). Selling pressure is expected to continue. Important: Before selling, ensure that the MACD indicator is below the zero line and has just started to fall.

Scenario #2: I also plan to sell the pound if there are two consecutive tests of the 1.3494 level while the MACD is in the overbought zone. This will limit the pair's upward potential and may trigger a downward reversal. A decline toward 1.3475 and 1.3449 can be expected.

Chart Key:

• Thin green line – entry price for long positions;
• Thick green line – suggested Take Profit level or a point to manually secure profits, as further growth above this level is unlikely;
• Thin red line – entry price for short positions;
• Thick red line – suggested Take Profit level or a point to manually secure profits, as further decline below this level is unlikely;
• MACD Indicator – when entering the market, use overbought and oversold zones as guidance.

Important:Beginner Forex traders should be very cautious when deciding to enter the market. Before major fundamental reports are released, it's best to stay out of the market to avoid sharp price fluctuations. If you choose to trade during news releases, always set stop-loss orders to minimize potential losses. Trading without stop-losses can quickly wipe out 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. Making spontaneous decisions based on the current market situation is an inherently losing strategy for intraday traders.