Trade review and tips for trading the British pound

The price test at 1.3449 occurred when the MACD indicator had moved significantly above the zero mark, which limited the pair's upward potential. For this reason, I did not buy the pound.

According to the data, last month saw a decrease in the number of jobless claims, contrary to earlier forecasts that had predicted an increase. This could indicate the possibility of the Bank of England using monetary policy tools more actively, particularly through further reductions in interest rates. However, it is too early to draw definitive conclusions. Despite positive trends in employment, several factors still constrain economic growth. Inflation, while showing signs of slowing, remains above the Bank of England's target. This could prompt the regulator to maintain caution regarding rate cuts, fearing a new wave of inflationary pressure. In addition, external factors such as geopolitical instability and a slowdown in global economic growth must also be considered.

Today's U.S. inflation release will be the key event of the day, shaping the short-term outlook for the U.S. dollar and, consequently, affecting other currencies including the pound. Investors will closely monitor any signs of accelerating inflation, which could prompt the Federal Reserve to reconsider its plans for monetary policy easing. The speech by Thomas Barkin will add further weight to the day. His comments on inflation and the U.S. economic outlook will be carefully analyzed by the market for indications of the Fed's next steps. Any hints of maintaining a hawkish stance could increase pressure on the pound and support the dollar.

As for the intraday strategy, I will focus mainly on implementing scenarios #1 and #2.

Buy signal

Scenario #1: I plan to buy the pound today when the price reaches around 1.3464 (green line on the chart), targeting a rise to 1.3510 (thicker green line on the chart). Around 1.3510, I will close purchases and open short positions in the opposite direction, aiming for a 30–35-point move from the level. A rise in the pound today can be expected only if U.S. inflation declines. Important: Before buying, make sure the MACD indicator is above the zero mark and just starting to rise from it.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.3440 level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. A rise to the opposite levels of 1.3464 and 1.3510 can be expected.

Sell signal

Scenario #1: I plan to sell the pound today after breaking below the 1.3440 level (red line on the chart), which should trigger a quick decline in the pair. The main target for sellers will be 1.3396, where I will close short positions and immediately open long positions in the opposite direction, aiming for a 20–25-point move from the level. Sellers may be active today if the data is strong. Important: Before selling, make sure the MACD indicator is below the zero mark and just starting to decline from it.

Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.3464 level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal downward. A decline to the opposite levels of 1.3440 and 1.3396 can be expected.

Chart notes:

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

Important: Beginner Forex traders should make entry decisions very cautiously. Before major fundamental releases, 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-loss orders, you could quickly lose your entire deposit, especially if you trade large volumes without applying money management. 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 an inherently losing strategy for an intraday trader.