Analysis of Trades and Trading Tips for the British Pound

During the second half of the day, the test of the 1.2528 price level coincided with the MACD indicator dropping significantly below the zero line, which limited the downward potential of the currency pair. For this reason, I decided not to sell the pound. Later, when the price reached the 1.2478 level, I planned to buy the pound on a rebound, which allowed me to secure a profit of about 30 pips from the market.

If Trump's stance softens in the near future and does not involve imposing restrictive tariffs against the UK, the pound is likely to continue its recovery from the significant drop it experienced earlier this year. Additionally, the strengthening of the pound could be supported by improving UK economic indicators, including GDP growth and declining inflation, which would boost confidence in the national currency.

Today's focus will be on data from the UK construction sector and the real estate market. The Construction PMI, scheduled for release in the morning, is an important indicator of activity within the industry. If the figure exceeds forecasts, it could boost investor confidence in the resilience of the UK economy. Additionally, the HBOS house price index may also affect market sentiment. Rising property prices could indicate stability in consumer demand and a strengthening domestic market. However, for the pound to continue its growth, the data must not only meet but significantly exceed expectations. Otherwise, pressure on the British currency could resurface, especially amid ongoing uncertainty regarding inflation and the Bank of England's next steps.

For today's trading strategy, I will primarily focus on implementing Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: I plan to buy the pound today at the entry point near 1.2562 (green line on the chart) with a target of rising to 1.2616 (thicker green line on the chart). Around 1.2616, I plan to exit long positions and open short positions (expecting a pullback of 30–35 pips from the level). Today's pound growth can be expected to continue yesterday's trend. Important! Before buying, ensure the MACD indicator is above the zero line and starting to rise.

Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the 1.2528 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth can be expected to the opposite levels of 1.2562 and 1.2616.

Sell Signal

Scenario #1: I plan to sell the pound today after the 1.2528 level is updated (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 1.2478 level, where I plan to exit short positions and immediately open long positions (expecting a pullback of 20–25 pips from the level). It's better to sell the pound from as high a point as possible, as the bullish market trend is still in play. Important! Before selling, ensure the MACD indicator is below the zero line and starting to decline.

Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the 1.2562 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline can be expected to the opposite levels of 1.2528 and 1.2478.

Chart Notes

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: A suggested target for 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: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
• MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Note for Beginner Traders

• Always approach market entry decisions cautiously.
• Avoid trading during major news releases to sidestep volatile price swings.
• If trading during news releases, always set stop-loss orders to minimize losses.
• Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
• A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.