Analysis of Trades and Trading Tips for the British Pound

The price test at 1.3249 coincided with the moment when the MACD indicator had just begun to rise from the zero line, confirming a valid entry point for buying the pound, which led to a gain of more than 20 points.

The U.S. ISM Services PMI came in below economists' forecasts, significantly impacting the dollar's exchange rate and pushing the British pound higher. The drop in the ISM index below expected levels signals a slowdown in growth within the services sector, a major component of the U.S. economy. Investors interpreted this as a possible reason for the Federal Reserve to ease its monetary policy.

This morning, the key event will be the release of the UK construction PMI for July. This indicator acts like a barometer, offering insight into the health of one of the most significant sectors of the UK economy and providing important information on overall economic conditions. The Construction PMI is based on surveys of purchasing managers in the construction sector. It measures economic activity by considering new orders, employment, and pricing changes. A reading above 50 points indicates sector expansion, while a reading below 50 signals contraction. Economists and traders will carefully analyze the released data. A sustained increase in the PMI reflects confidence in the construction industry, which typically supports broader economic growth, job creation, and investment activity. Conversely, a drop in the PMI could raise concerns about the sector's outlook and its impact on the broader economy.

For intraday strategy, I will focus primarily on Scenarios #1 and #2.

Buy Scenario

Scenario #1: Today, I plan to buy the pound upon reaching the entry point around 1.3315 (green line on the chart), aiming for a rise to 1.3364 (thicker green line on the chart). Near 1.3364, I plan to exit the long position and open a short in the opposite direction, targeting a 30–35 point reversal from the level. A bullish outlook for the pound today is justified only if the data is strong.

Important: Before buying, make sure the MACD indicator is above the zero line and just starting to rise.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.3296 level while the MACD indicator is in oversold territory. This would limit the downside potential and lead to a reversal to the upside. A rise toward 1.3315 and 1.3364 can be expected.

Sell Scenario

Scenario #1: Today, I plan to sell the pound after the price breaks below 1.3296 (red line on the chart), which would trigger a quick decline in the pair. The key target for sellers will be 1.3266, where I plan to exit shorts and open long positions in the opposite direction (targeting a 20–25 point bounce from the level). Selling the pound is justified in the event of very weak data.

Important: Before selling, make sure the MACD indicator is below the zero line and just starting to decline.

Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the 1.3315 level while the MACD indicator is in overbought territory. This would limit the pair's upside potential and trigger a reversal to the downside. A decline toward 1.3296 and 1.3266 can be expected.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.