Trade review and tips for trading the British pound

The price test of 1.3524 occurred when the MACD indicator had just started moving downward from the zero mark, confirming the correct entry point for selling the pound. As a result, the pair fell by more than 25 points.

The drop was caused by a sharp increase in public sector borrowing, which threatens the UK's economic outlook and the political career of Rachel Reeves. The surge in government debt, reported at far higher levels than expected, triggered panic among investors. Many economists questioned the government's ability to manage finances effectively, which immediately weighed on the pound sterling. This significantly damaged the standing of Rachel Reeves, who plays a key role in financial policy. The opposition seized the opportunity to accuse the government of incompetence and irresponsibility, using the growing debt as its main argument.

In the second half of the day, there are no US statistics scheduled, so the market's focus will be on a speech by FOMC member Mary Daly. Her dovish tone could pressure the dollar, leading to a slight strengthening of the pound. If Daly's rhetoric is perceived as only a temporary deviation from the Fed's general course, the dollar will continue to regain ground.

As for intraday strategy, I will rely more on scenarios #1 and #2.

Buy signal

Scenario #1: I plan to buy the pound today at the entry point around 1.3504 (green line on the chart), targeting growth toward 1.3564 (thicker green line on the chart). At 1.3564 I will exit the buys and open sells in the opposite direction, expecting a 30–35 point move in the opposite direction. A strong pound rally today is unlikely. Important! Before buying, make sure the MACD indicator is above zero and just starting to rise from it.

Scenario #2: I also plan to buy the pound if there are two consecutive tests of 1.3463, at the moment when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 1.3504 and 1.3564 can be expected.

Sell signal

Scenario #1: I plan to sell the pound after updating the 1.3463 level (red line on the chart), which will lead to a quick decline of the pair. Sellers' key target will be 1.3379, where I will exit the sells and immediately open buys in the opposite direction (expecting a 20–25 point move in the opposite direction). The pound could fall significantly in the second half of the day. Important! Before selling, make sure the MACD indicator is below zero and just starting to decline from it.

Scenario #2: I also plan to sell the pound if there are two consecutive tests of 1.3504, at the moment when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.3463 and 1.3379 can be expected.

Chart notes:

• Thin green line – entry price for buying the instrument;
• Thick green line – suggested price for placing Take Profit or manually fixing profit, since further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – suggested price for placing Take Profit or manually fixing profit, since further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to follow overbought and oversold zones.

Important. Beginner traders in the Forex market should be very cautious in making entry decisions. It is best to stay out of the market before important fundamental reports are released to avoid sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember: for successful trading, you need a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.