Analysis of Trades and Tips for Trading the British Pound

The test of the 1.2671 level occurred when the MACD indicator started to move downward from the zero line, confirming a valid entry point for selling the pound in line with the ongoing downtrend. As a result, the pair dropped to the target level of 1.2639. A bounce from this level, as mentioned in my morning forecast, generated approximately 20 points in profit. In the second half of the day, US data on initial jobless claims will be released, with the Producer Price Index (PPI) figures being of greater interest. An increase in PPI would likely drive the US dollar higher, as observed yesterday. FOMC member Thomas Barkin's speech is expected to align with his colleagues' hawkish stance, further supporting the dollar. For intraday strategy, I will focus on implementing Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound at the 1.2683 level (green line on the chart), targeting a rise to 1.2734 (thicker green line on the chart). At 1.2734 I will exit the market and open short positions in the opposite direction, aiming for a movement of 30–35 points downward. A rise in the pound today is likely only if US data proves weak.It is important to ensure the MACD indicator is above the zero line and beginning to rise before initiating buy trades.

Scenario #2: I also plan to buy the pound if the 1.2649 level is tested twice consecutively, with the MACD indicator in the oversold area. This would limit the pair's downward potential and encourage a short-term upward correction toward the 1.2683 and 1.2734 levels.

Sell Signal

Scenario #1: I plan to sell the pound after breaking below the 1.2649 level (red line on the chart), leading to a quick decline in the pair. The key target for sellers will be 1.2598, where I will exit my short positions and immediately buy in the opposite direction, as this level is expected to act as significant support, providing a rebound opportunity for a 20–25 point upward correction.It is important to ensure the MACD indicator is below the zero line and beginning to fall before initiating sell trades.

Scenario #2: I also plan to sell the pound if the 1.2683 level is tested twice consecutively, with the MACD indicator in the overbought area. This would limit the pair's upward potential and likely trigger a market reversal toward the support levels of 1.2649 and 1.2598.

Chart Key:

• Thin Green Line: Entry price for buying the trading instrument.
• Thick Green Line: Target price for setting Take Profit or manually closing positions, as further growth above this level is unlikely.
• Thin Red Line: Entry price for selling the trading instrument.
• Thick Red Line: Target price for setting Take Profit or manually closing positions, as further declines below this level are unlikely.
• MACD Indicator: Monitor overbought and oversold zones for confirmation when entering the market.

Important Notes for Beginner Forex Traders:

• Exercise caution when making market entry decisions. Stay out of the market before significant fundamental reports to avoid sharp price fluctuations.
• Always set stop-loss orders to minimize potential losses when trading during news releases. Without stop-losses, you risk losing your entire deposit, especially if trading large volumes without proper money management.
• Successful trading necessitates a clear trading plan, as demonstrated in the strategies outlined above. Spontaneous trading decisions based on current market conditions are a losing strategy for intraday traders.