Trade Review and Trading Tips for the British Pound

A test of the 1.3389 level occurred at a time when the MACD indicator was just beginning to move upward from the zero line, which confirmed a valid entry point for a long position in the pound. As a result, the pair rose by only 5 points.

The absence of new economic data from the United Kingdom that could act as a catalyst for pound movement created a kind of vacuum, where traders preferred to remain on the sidelines. This resulted in a relatively narrow trading range, with the pair fluctuating within a few points and showing no clearly defined trend.

Next, we are awaiting the release of U.S. Consumer Price Index (CPI) data and Core CPI excluding food and energy. The Consumer Price Index is one of the key macroeconomic indicators reflecting price dynamics across a broad range of goods and services purchased by households. Its rise signals inflationary pressures in the economy, while a decline may indicate deflation. In terms of monetary policy, rising CPI often prompts the Federal Reserve to tighten policy, including raising interest rates. The projected increase in both headline CPI and core CPI is an important factor supporting the U.S. dollar.

Regarding intraday strategy, I will primarily rely on Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: I plan to buy the pound today at an entry point around 1.3404 (green line on the chart), targeting a rise toward 1.3451 (thicker green line on the chart). At 1.3451, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move in the opposite direction from that level). Pound appreciation today can only be expected in the case of weak U.S. data. Important: Before buying, ensure that the MACD indicator is above the zero line and has just started moving upward from it.

Scenario #2: I also plan to buy the pound if there are two consecutive tests of the 1.3377 level while the MACD is in oversold territory. This would limit downward potential and trigger a reversal to the upside. In this case, a move toward 1.3404 and 1.3451 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound after a break below the 1.3377 level (red line on the chart), which should lead to a rapid decline in the pair. The key downward target is 1.3331, where I will exit short positions and immediately open long positions in the opposite direction (expecting a 20–25 point rebound from that level). Selling pressure may return in the case of a sharp increase in U.S. inflation. Important: Before selling, ensure that the MACD indicator is below the zero line and has just started moving downward from it.

Scenario #2: I also plan to sell the pound if there are two consecutive tests of the 1.3404 level while the MACD is in overbought territory. This would limit upward potential and trigger a reversal to the downside. A decline toward 1.3377 and 1.3331 can be expected.

What Is on the Chart:

• Thin green line – entry price for buying the instrument;
• Thick green line – projected take-profit level or area for manual profit-taking, as further upside above this level is considered unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – projected take-profit level or area for manual profit-taking, as further downside below this level is considered unlikely;
• MACD indicator – trading decisions should be based on overbought and oversold zones.

Important: Beginner Forex traders should be extremely cautious when entering the market. Ahead of major fundamental data releases, it is best to stay out of the market to avoid sharp volatility. If you choose to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you may quickly lose your entire deposit, especially if risk management is not applied and large position sizes are used.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are inherently a losing strategy for intraday traders.