Analysis of Trades and Tips for Trading the British Pound

The test of the 1.2583 level occurred as the MACD indicator began its downward movement from the zero line, confirming a valid entry point for selling the pound. Consequently, the pair fell by more than 30 points but failed to reach the target level of 1.2545.

Statements from Bank of England representatives indicate that interest rate cuts are unlikely in the near future. This has increased pressure on the British pound, which has lost value amid global economic instability and domestic challenges. The long-term consequences of high interest rates are becoming apparent, with many experts forecasting prolonged weakening of the pound. Facing challenging economic realities, policymakers are avoiding decisive changes to monetary policy, citing concerns about inflation and slowing growth. This uncertainty continues to concern investors and intensify pressure on the pound.

For the second half of the day, no significant U.S. economic data is scheduled, so renewed pressure on the pound could occur at any time. For intraday strategies, I will focus on Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today at the 1.2577 entry point (green line on the chart), targeting a rise to 1.2602 (thicker green line on the chart). At 1.2602, I will exit the market and open sell positions in the opposite direction, expecting a 30-35 point downward movement. Today, any rise in the pound is likely to occur only as part of a correction.

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 if the 1.2553 level is tested twice consecutively and the MACD indicator signals oversold conditions. This setup would likely limit the pair's downward potential and prompt a market reversal upward, targeting 1.2577 and 1.2602.

Sell Signal

Scenario #1: I plan to sell the pound after a breakout below 1.2553 (red line on the chart), which is expected to result in a quick decline in the pair. The key target for sellers is 1.2529, where I will exit sales and open buy positions in the opposite direction, anticipating a 20-25 point upward correction. Sellers are likely to become active following a breakout above the daily high.

Important: Before selling, ensure the MACD indicator is below the zero line and starting to decline.

Scenario #2: Selling the pound is also justified if the 1.2577 level is tested twice consecutively, with the MACD indicator signaling overbought conditions. This setup is likely to cap the pair's upward potential and prompt a reversal downward, targeting 1.2553 and 1.2529.

Chart Notes:

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: Estimated level for setting Take Profit or manually securing profits, as further growth beyond this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: Estimated level for setting Take Profit or manually securing profits, as further declines below this level are unlikely.
• MACD indicator: Evaluate overbought and oversold zones before entering the market.

Important Note:

Beginner traders should approach market entry decisions cautiously. It is advisable to stay out of the market during the release of significant fundamental reports to avoid sharp price fluctuations. If trading during news events, always use stop-loss orders to limit losses. Trading without stop-loss orders, especially with large volumes, could result in significant losses or even the depletion of your trading account.

Successful trading requires a clear, structured plan, like the one outlined above. Making impulsive trading decisions based on short-term market conditions often leads to unfavorable outcomes for intraday traders.