Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3342 price level occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. For this reason, I did not buy the pound. Selling on the rebound from 1.3378 resulted in a solid 30-point decline in the pair.

The pound showed confident, though cautious, growth in response to today's speech by Catherine Mann, one of the most influential members of the Bank of England's Monetary Policy Committee. Investors listened carefully to every word, understanding that Mann traditionally takes a hawkish stance, and today's tone only confirmed her determination. In her speech, Mann clearly outlined the contours of global pressure, emphasizing that the British economy remains highly sensitive to external shocks and supply chain disruptions. However, the key point was her reiteration of the recent tough stance on monetary policy. She stated that the Bank of England would not achieve its 2% inflation target either in the short term or in the long term. These words sounded like a verdict against hopes for an imminent easing of policy, strengthening the British currency.

Going forward, market participants will focus on the NAHB index report, which is likely to remain subdued as the US housing market continues to adapt to another rise in interest rates. Analysts expect the indicator to show little significant growth, which only confirms the picture of stagnation in the sector. In the absence of other macroeconomic releases, this short-term indicator of builder sentiment may generate only localized volatility without changing the broader direction of the pair.

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

Buy Signal

Scenario No. 1: Today, I plan to buy the pound upon reaching the entry point around 1.3373 (green line on the chart), targeting growth toward 1.3411 (thicker green line on the chart). Around 1.3411, I plan to exit long positions and open short positions in the opposite direction, expecting a movement of 30–35 points in the opposite direction from the level. Growth in the pound today can only be expected after weak US data.Important: Before buying, make sure that the MACD indicator is above the zero line and just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today if there are two consecutive tests of the 1.3345 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 1.3373 and 1.3411 can then be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound today after a breakout below the 1.3345 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be 1.3301, where I plan to exit short positions and immediately open long positions in the opposite direction, expecting a movement of 20–25 points in the opposite direction from the level. Pressure on the pound will return today if strong US data is released.Important: Before selling, make sure that the MACD indicator is below the zero line and just beginning its decline from it.

Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of the 1.3373 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.3345 and 1.3301 can then be expected.

What's on the Chart

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated level where Take Profit orders can be placed or profits can be manually secured, since further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated level where Take Profit orders can be placed or profits can be manually secured, since further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to use overbought and oversold zones as guidance.

Important

Beginner Forex traders 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 place stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade with large volumes.

Remember that successful trading requires a clear trading plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.