Trade review and tips for trading the British pound

The test of the 1.3580 level occurred when the MACD indicator had just started moving downward from the zero mark, confirming a valid entry point for selling the pound. As a result, the pair declined to the target level of 1.3540.

The pound fell in response to news that Iran had attacked a U.S. military ship attempting to enter the Strait of Hormuz area. However, U.S. media have not yet confirmed this information. This discrepancy in the information flow, combined with elements of geopolitical uncertainty, traditionally puts pressure on developed market currencies, and the British pound was no exception. The lack of confirmation from U.S. media adds intrigue and uncertainty. This could indicate either a deliberate withholding of information by Washington until all circumstances are clarified or a denial that has not yet been widely disseminated.

As for the data, a report on U.S. factory orders is expected in the second half of the day. It is assumed that the upward trend will continue, but significant deviations from forecasts could trigger noticeable volatility in financial markets. The upcoming speech by Federal Open Market Committee member John Williams is also of interest. Statements from this Federal Reserve representative regarding the current economic situation, inflation expectations, and the future path of monetary policy could significantly influence market expectations for future interest rates. Any hints of a possible shift in rhetoric or change in emphasis could prompt traders to reassess their expectations.

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

Buy signal

Scenario No. 1: I plan to buy the pound today when the entry point is reached around 1.3557 (green line on the chart), with a target of 1.3602 (thicker green line on the chart). Around 1.3602, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move). Growth in the pound today can be expected only after weak U.S. data.Important! Before buying, make sure that the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today in the case of two consecutive tests of the 1.3531 level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward reversal. Growth toward the opposite levels of 1.3557 and 1.3602 can be expected.

Sell signal

Scenario No. 1: I plan to sell the pound today after a break below the 1.3531 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be 1.3485, where I will exit short positions and also open long positions in the opposite direction (expecting a 20–25 point move). Pressure on the pound will return today if U.S. data is strong.Important! Before selling, make sure that the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound today in the case of two consecutive tests of the 1.3557 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.3531 and 1.3485 can be expected.

What's on the chart:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated level to place Take Profit or lock in profits manually, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated level to place Take Profit or lock in profits manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to rely on overbought and oversold zones.

Important: Beginner traders in the Forex market should make market entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-loss orders, you can quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

Remember that successful trading requires a clear trading plan, like the one outlined above. Spontaneous decision-making based on current market conditions is inherently a losing strategy for an intraday trader.