Trade Analysis and Tips for the British Pound

The test of the price at 1.3225 coincided with the moment when the MACD indicator was just starting to move downward from the zero mark, confirming the correct entry point for selling the pound. As a result, the pair dropped to the target level of 1.3196.

The British pound showed a slight retracement upward against the US dollar amid new statements from President Donald Trump regarding the situation in the Middle East and tensions surrounding the Strait of Hormuz. This short-term strengthening of the pound can be seen as a market reaction to the expression of diplomatic rhetoric that, albeit slightly, reduces geopolitical tension. However, despite the statements about the US's readiness to cease military operations against Iran, many experts and market participants view such promises with considerable skepticism.

Today, attention will be focused on the UK in the first half of the day. A number of important macroeconomic data on the United Kingdom's economic situation are expected to be released. At the forefront for market participants is the change in Gross Domestic Product (GDP). This metric serves as an indicator of the overall state of the economy and can cause significant fluctuations in the value of the British pound. Alongside the GDP figures, information about changes in investment volumes will also be disclosed. This parameter acts as a predictive tool for future business activity and demonstrates the degree of confidence the corporate sector has in national development prospects. Furthermore, close attention will also be paid to the current account balance. This indicator provides an overall picture of incoming and outgoing financial flows between the United Kingdom and the rest of the world, including trade in goods and services, investment income, and transfers. Significant deviations in the current account balance may signal potential imbalances in foreign trade or capital movement, which can also impact the national currency's quotes and overall long-term economic stability.

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 when it reaches the entry point around 1.3210 (the green line on the chart), with a target for growth to 1.3231 (the thicker green line on the chart). At around 1.3231, I plan to exit the long positions and open short positions in the opposite direction (anticipating a movement of 30-35 pips in the opposite direction from the level). We can expect the pound to grow today only after good data. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting to rise.
• Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the price at 1.3193 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. An increase can be expected towards the opposite levels of 1.3210 and 1.3231.

Sell Scenarios

• Scenario #1: I plan to sell the pound today after the 1.3193 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 the 1.3170 level, where I plan to exit the shorts and immediately buy back (anticipating a 20-25-pip move in the opposite direction from the level). Pressure on the pound may return if the data is bad. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting to decline.
• Scenario #2: I also plan to sell the pound today if the price tests 1.3210 twice in a row while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decrease can be expected towards the opposite levels of 1.3193 and 1.3170.

What's on the Chart:

• The thin green line represents the entry price at which you can buy the trading instrument;
• The thick green line is the assumed price where you can set Take Profit or manually take profit, as further growth above this level is unlikely;
• The thin red line indicates the entry price at which you can sell the trading instrument;
• The thick red line is the assumed price where you can set Take Profit or manually take profit, as further decline below this level is unlikely;
• The MACD indicator. When entering the market, it's important to refer to the overbought and oversold zones.

Important: Beginner traders in the forex market need to make entry decisions very carefully. It is best to stay out of the market before the release of important fundamental reports to avoid sharp fluctuations in prices. If you choose to trade during the release of news, always set Stop Loss orders to minimize losses. Without placing Stop Loss orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

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