Analysis of Trades and Tips for Trading the British Pound

The test of the price at 1.3672 occurred when the MACD indicator was just beginning to move upward from the zero mark, confirming the correct entry point for buying the pound. As a result, the pair rose by more than 20 pips.

News that US retail sales showed zero growth in December negatively impacted the US dollar, supporting the British pound's position in the first half of the day. This came as an unpleasant surprise for market participants who expected some revitalization of consumer activity ahead of the holidays. The lack of growth indicates a slowdown in US economic activity, which in turn may affect the Federal Reserve's future interest rate decisions.

From the perspective of macroeconomic data, today is expected to be quite quiet in the UK. Since no significant economic reports are expected, the market will likely lack new reasons to reassess the British pound's value. This creates favorable conditions for market participants who previously bet on GBP/USD's strengthening, continuing the upward trend observed last week. Yesterday's decline in the pair is likely merely a temporary correction, and without confirming negative data today, it may be completely reversed.

Regarding the intraday strategy, I will primarily rely on implementing Scenarios #1 and #2.

Buy Scenarios

• Scenario #1: I plan to buy the pound today upon reaching the entry point around 1.3675 (green line on the chart), targeting a move to 1.3700 (thicker green line on the chart). Near 1.3700, I intend to exit my long positions and open short positions in the opposite direction (anticipating a movement of 30-35 pips in the opposite direction from the level). One can expect the pound to grow today, in line with the observed trend. Important! Before purchasing, ensure the MACD indicator is above the zero mark and just starting to rise from it.
• Scenario #2: I also plan to buy the pound today if the price tests 1.3655 twice in a row while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. An increase towards the opposing levels of 1.3675 and 1.3700 can be expected.

Sell Scenarios

• Scenario #1: I plan to sell the pound today after it breaks the 1.3655 level (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the level of 1.3625, where I intend to exit my shorts and immediately buy in the opposite direction (anticipating a movement of 20-25 pips in the opposite direction from the level). Pound sellers will come into play if there is a failed breakout above the daily high. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting to decline from it.
• Scenario #2: I also plan to sell the pound today if the price tests 1.3675 twice in a row while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline to the opposing levels of 1.3655 and 1.3625 can be expected.

What's on the Chart:

The thin green line represents the entry price at which one can buy the trading instrument;

The thick green line represents the approximate price where one can set Take Profit or secure profits, as further growth above this level is unlikely;

The thin red line represents the entry price at which one can sell the trading instrument;

The thick red line represents the approximate price where one can set Take Profit or secure profits, as further decline below this level is unlikely;

The MACD indicator: when entering the market, it is important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market should be very careful when making entry decisions. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.