Trade review and tips for trading the British pound

The price test of 1.3511 occurred when the MACD indicator had already moved well above the zero mark, which limited the pair's upward potential.

The absence of U.K. statistics held back the pound's upward momentum. Technical analysis also points to the possibility of a correction. Overbought signals and divergence on daily charts warn of weakening bullish momentum. A break of key support levels could trigger sellers' activity and strengthen the downtrend.

In the second half of the day, traders will focus on U.S. consumer credit data, where overly strong figures could lead to a decline in GBP/USD. This is because robust consumer credit data, as an indicator of strong U.S. consumer demand, strengthens the dollar. Investors, seeing the confidence of U.S. consumers, tend to shift capital into what they perceive as a more stable and promising currency, putting pressure on the pound. In the medium term, GBP/USD will remain under the influence of several forces, with Bank of England policy and inflation expectations in the U.K. playing a key role.

As for intraday strategy, I will rely more on Scenarios #1 and #2.

Buy Signal

Scenario #1: Today I plan to buy the pound around 1.3520 (green line on the chart) with a target at 1.3555 (thicker green line on the chart). Around 1.3555, I will exit buy positions and open sell trades in the opposite direction (expecting a 30–35 point move back from the level). A strong pound rally today is unlikely.Important! Before buying, make sure the MACD indicator is above the zero mark and only beginning to rise from it.

Scenario #2: I also plan to buy the pound if there are two consecutive tests of 1.3500 at the moment when the MACD indicator is in the oversold area. This will limit the pair's downward potential and trigger a reversal upward. Growth can be expected toward the opposite levels of 1.3520 and 1.3555.

Sell Signal

Scenario #1: I plan to sell the pound after breaking below 1.3500 (red line on the chart), which will lead to a quick decline in the pair. Sellers' key target will be 1.3466, where I will exit sell trades and immediately open buys in the opposite direction (expecting a 20–25 point move back from the level). A strong pound drop is unlikely.Important! Before selling, make sure the MACD indicator is below the zero mark and only beginning to fall from it.

Scenario #2: I also plan to sell the pound if there are two consecutive tests of 1.3520 at the moment when the MACD indicator is in the overbought area. This will limit the pair's upward potential and trigger a reversal downward. A decline can be expected toward the opposite levels of 1.3500 and 1.3466.

What's on the chart:

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

Important: Beginner Forex traders must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during news releases, always set stop-loss orders to minimize losses. Without stop-losses, you can very quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember: for successful trading, you need a clear trading plan, like the one I presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.