Trade Analysis and Advice on Trading the British Pound

The price test of 1.3393 occurred when the MACD indicator had just started moving upward from the zero line, confirming a correct entry point for buying the pound. However, the pair failed to show any notable growth afterward.

The increase in the U.K. public sector debt burden triggered a weakening of the British pound. This negative trend creates an unfavorable backdrop for the government and signals potential problems that the British economy may face. Investors' concerns are linked not only to the current debt level but also to the prospects for its further increase. The U.K. government, faced with the need to finance social programs and stimulate economic growth, is forced to resort to borrowing. However, the lack of a clear strategy for reducing debt and maintaining financial stability raises questions about the country's ability to service its obligations in the long term.

During the U.S. session, there are no scheduled statistics releases from the United States, so all attention will be focused on the speech by FOMC member Christopher Waller. Investors will be closely watching for any hints about possible changes in the Federal Reserve's policy strategy. The pound is likely to remain under pressure, as no new information is expected from Waller. Overall, the U.S. session promises to be calm. I recommend exercising caution and keeping an eye on news related to China and the United States.

As for intraday strategy, I will mainly rely on the implementation of scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound when the price reaches around 1.3398 (green line on the chart), with a target of rising to 1.3432 (the thicker green line). Around 1.3432, I plan to exit buy positions and open short positions in the opposite direction, expecting a 30–35 point movement back from that level. A strong rise in the pound is unlikely today.Important! Before buying, make sure the MACD indicator is above the zero line and just beginning to rise from it.

Scenario #2: I also plan to buy the pound in case of two consecutive tests of the 1.3367 level, at a time when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upward. You can then expect growth toward the opposite levels of 1.3398 and 1.3432.

Sell Signal

Scenario #1: I plan to sell the pound today after a breakout below 1.3367 (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 1.3340, where I plan to exit short positions and immediately open buys in the opposite direction, expecting a 20–25 point rebound from that level. The pound could see a sharp drop in the second half of the day.Important! Before selling, make sure the MACD indicator is below the zero line and just beginning to decline from it.

Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the 1.3398 price level, at a time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and trigger a market reversal downward. A decline toward the opposite levels of 1.3367 and 1.3340 can then be expected.

Chart Explanation

• Thin green line – entry price for buying the trading instrument.
• Thick green line – approximate price for setting a Take Profit or manually closing a position, as further growth above this level is unlikely.
• Thin red line – entry price for selling the trading instrument.
• Thick red line – approximate price for setting a Take Profit or manually closing a position, as further decline below this level is unlikely.
• MACD indicator – when entering the market, it's important to consider overbought and oversold zones.

Important Notice for Beginners

Beginner Forex traders should be extremely cautious when making market entry decisions. Before the release of major fundamental reports, it's best to stay out of the market to avoid sudden price swings. If you decide to trade during news events, always set stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you neglect money management and trade with large volumes.

And remember: to trade successfully, you must have a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for intraday traders.