Trade Analysis and Trading Tips for the British Pound

The test of the 1.3419 price level occurred when the MACD indicator had already moved well below the zero line, limiting the pair's downside potential. For this reason, I did not sell the pound.

The British pound continues to show steady growth. However, this rise is more a consequence of U.S. dollar weakness than pound strength. The dollar is under significant pressure due to the Federal Reserve's rhetoric. Dovish remarks from Fed officials suggest further interest rate cuts, which negatively affect the dollar's position.

There are no major economic releases scheduled for the U.K. today, so market attention will be focused on speeches from Huw Pill, a member of the Bank of England's Monetary Policy Committee, and Sarah Breeden from the Bank's Financial Policy Committee. Market participants will listen closely, especially regarding the future course of the BoE's monetary policy.

Given the overall hawkish tone from other BoE officials recently, Breeden and Pill may also adopt a restrictive stance, supporting the pound. Their comments might shed light on internal divisions within the MPC and help shape a more defined outlook on future interest rate changes. Signals related to the Bank's strategy for achieving its 2% inflation target will also carry weight.

As for the intraday strategy, I will rely primarily on the execution of scenarios No. 1 and No. 2.

Buy Scenarios

Scenario No. 1: I plan to buy the pound at the entry point near 1.3467 (thin green line on the chart), targeting a rise to 1.3514 (thick green line). Around 1.3514, I plan to exit long trades and open short positions on a pullback, expecting a 30–35 pip retracement. Long trades should be considered only after hawkish commentary from Bank of England officials. Note: Before buying, make sure the MACD indicator is above the zero line and just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound following two consecutive tests of the 1.3442 level, provided the MACD indicator is located in the oversold zone. This would limit downside pressure and indicate a potential upward reversal. A rise toward 1.3467 and 1.3514 can be expected.

Sell Scenarios

Scenario No. 1: I plan to sell the pound if the 1.3442 level (thin red line) is broken, which could lead to a swift move down. My exit target is 1.3407 (thick red line), where I will close the short position and open a long trade on the rebound, expecting a 20–25 pip upward move. Sellers are expected to act cautiously. Note: Before selling, make sure the MACD indicator is below the zero line and just beginning its downward move.

Scenario No. 2: I also plan to sell the pound in the event of two consecutive tests of the 1.3467 level while the MACD indicator is in the overbought zone. This setup would signal that the pair's upside potential is limited and could lead to a downward reversal. A decline toward 1.3442 and then 1.3407 is expected.

What the Chart Shows:

• Thin green line: the entry price for opening long (buy) positions
• Thick green line: the anticipated price level where Take Profit can be set, or profit manually fixed, as further growth above this level is unlikely
• Thin red line: the entry price for opening short (sell) positions
• Thick red line: the anticipated level where Take Profit can be set, or profit manually fixed, as further decline below this area is improbable
• MACD Indicator: zone-based entry logic using overbought and oversold areas

Important Note for Beginners:

Beginner traders in the Forex market must be especially cautious when entering trades. It is best to stay out of the market during the release of important economic reports to avoid getting caught in sharp and unpredictable price swings.

If you choose to trade around news announcements, always place stop-loss orders to manage risk. Without a stop-loss, your entire account could be wiped out quickly—especially if you ignore money management principles and trade with oversized positions.

And remember: for successful trading, a clear plan—such as the one presented above—is essential. Spontaneous decision-making based on market noise is an inherently losing strategy for intraday traders.