Trade Analysis and Tips for the British Pound

The price test at 1.3269 coincided with the moment the MACD indicator began to move down from the zero level, confirming a valid entry point for selling the pound. As a result, the pair fell by 15 points before selling pressure eased.

Weak data showing a sharp drop in UK construction activity pushed the pair lower. The construction PMI published today came in well below analysts' expectations, raising concerns about a slowdown in the country's economic growth. Despite this, the pound has shown resilience, avoiding a deeper decline. The situation in the construction sector, along with broader macroeconomic risks, continues to pressure the British currency. In the near term, labor market and inflation data will play a key role in shaping expectations for the UK economy.

Statements are expected today from FOMC members Susan M. Collins, Lisa D. Cook, and Mary Daly. If their tone hints at potential rate cuts, the pound may strengthen further against the dollar. However, a cautious stance regarding further rate reductions could spark investor optimism and lead to dollar buying.

For today's intraday strategy, I'll be relying primarily on Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today if the price reaches the entry point around 1.3323 (green line on the chart), targeting a rise to 1.3364 (thicker green line). Around 1.3364, I'll take profit and open short positions in the opposite direction (expecting a 30–35 point move back from the level). Today's pound growth is only likely if Fed representatives adopt a dovish tone. 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 if there are two consecutive tests of the 1.3296 level while the MACD is in the oversold zone. This would limit the downward potential and trigger a market reversal to the upside. A rise toward 1.3323 and 1.3364 can then be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after a breakout below 1.3296 (red line on the chart), which should trigger a quick decline. Sellers' main target will be 1.3260, where I'll take profit and open long positions in the opposite direction (expecting a 20–25 point rebound). Sellers will likely act if Fed officials maintain a hawkish stance. Important: Before selling, ensure the MACD is below the zero mark and just beginning to fall from it.

Scenario #2: I also plan to sell the pound after two consecutive tests of the 1.3323 level while the MACD is in the overbought zone. This would limit the upward potential and prompt a downward market reversal. A decline toward 1.3296 and 1.3260 can then be expected.

Chart Legend:

• Thin green line – entry price to buy the instrument.
• Thick green line – estimated take profit level or suggested area to lock in gains; further growth is unlikely above this level.
• Thin red line – entry price to sell the instrument.
• Thick red line – estimated take profit level or suggested area to lock in gains; further decline is unlikely below this level.
• MACD Indicator – use overbought and oversold zones to guide market entries.

Important Note for Beginner Traders on Forex:

Beginner traders should approach market entries with caution. Before the release of important fundamental reports, it's best to stay out of the market to avoid sharp price swings. If you decide to trade during news events, always place stop-loss orders to minimize losses. Without stop-losses, your entire deposit could quickly vanish—especially if you ignore money management and trade large volumes.

And remember: successful trading requires a clear trading plan like the one outlined above. Making impulsive decisions based on current market movement is a losing strategy for intraday trading.