Analysis of Trades and Tips for Trading the British Pound

The price test at 1.3618 coincided with the moment when the MACD indicator was beginning to move down from the zero mark, confirming the correct entry point for selling the pound. As a result, the pair declined towards the target level of 1.3597.

The moderately favorable report on the Federal Reserve set the tone for trading and supported the dollar, though the moves were not sharp. U.S. GDP grew by 1.5% year-on-year in the second quarter, slowing from 2.1% in the previous quarter; however, the inflation component remained stable. The PCE price index and the core index increased by 0.2% from June, and their annual figures were 3.7% and 3.3%, respectively, which fell within market expectations. This alignment of data with forecasts dictated the cautious reaction. Against this backdrop, the British pound became dependent on external forces and yielded to the dollar. The strengthening of the American currency exerted pressure on GBP/USD, but the absence of surprises in the reports prevented the pair from a significant decline.

Today, the empty economic calendar for the UK leaves the pound without its own drivers, shifting it toward dependence on external factors. In such a situation, the key factors for the pair become the dynamics of the dollar and the overall risk appetite. Since the pound is already under pressure following the recent strengthening of the dollar against the backdrop of American inflation, the lack of internal drivers only amplifies the risks of further GBP/USD declines. Without fresh drivers, the pair struggles to break away from sellers, and pressure on it may persist.

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

Buying Scenarios

Scenario No. 1: I plan to buy the pound today when the entry point reaches around 1.3595 (the green line on the chart), with the aim of reaching 1.3611 (the thicker green line on the chart). At 1.3611, I plan to exit the market and also sell the pound in the opposite direction, anticipating a move of 30-35 pips from the entry point. One can expect the pound to rise today in continuation of the trend. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning its upward movement from there.

Scenario No. 2: I also plan to buy the pound today in the event of two consecutive tests of 1.3584 when the MACD indicator is in the oversold area. This will limit the downside potential of the pair and lead to an upward market reversal. One can expect a rise to the opposite levels of 1.3595 and 1.3611.

Selling Scenarios

Scenario No. 1: I plan to sell the pound after the 1.3584 level (the red line on the chart) is updated, which will trigger a quick decline in the pair. The key target for sellers will be 1.3568, where I plan to exit the short position and immediately buy in the opposite direction (anticipating a move of 20-25 pips in the opposite direction from the level). Only bad news will return pressure on the pound. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning its downward movement from there.

Scenario No. 2: I also plan to sell the pound today in the event of two consecutive tests of 1.3595, with the MACD indicator in the overbought area. This will limit the upside potential of the pair and lead to a downward market reversal. One can expect a decline to the opposing levels of 1.3584 and 1.3568.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price where take profit can be set, or profit can be realized, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price where take profit can be set, or profit can be realized, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner forex traders need to make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.