Trade Analysis and Tips for Trading the British Pound

The test of the 1.3470 price level occurred at a moment when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. The second test of 1.3470 coincided with the MACD being in oversold territory, which led to the execution of Scenario No. 2 (buying the pound) and resulted in a 14-point rise in the pair.

Retail sales data from the Confederation of British Industry (CBI) went largely unnoticed by traders and had no significant impact on the British pound. The CBI report, which is intended to reflect current retail sales dynamics, showed a mixed picture without clear signals for a sharp shift in market sentiment.

Going forward, attention will shift to U.S. data. Consumer confidence figures in the United States are expected. This indicator, as a barometer of consumer sentiment, plays an important role in assessing potential consumer demand, which in turn is one of the key drivers of economic growth. A decline in consumer confidence may signal an upcoming slowdown in spending, which could indirectly influence Federal Reserve monetary policy decisions.

In addition to consumer confidence data, the housing price index will also be released. This indicator reflects changes in residential real estate prices, which are directly linked to household wealth and purchasing power. Rising house prices are generally associated with increased consumer spending, while declining prices may indicate the opposite. Traders will closely analyze these figures to assess the stability of the U.S. housing market and its impact on the overall inflation outlook. Weak data will put pressure on the dollar.

As for the intraday strategy, I will continue to rely mainly on Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1

Today, I plan to buy the pound when the entry point at around 1.3485 is reached (green line on the chart), with a target of 1.3520 (thicker green line on the chart). Around 1.3520, I will exit buy positions and open short positions in the opposite direction, expecting a 30–35 point reversal. Pound growth today can only be expected after weak U.S. data.

Important: Before buying, make sure the MACD indicator is above the zero line and has just begun rising from it.

Scenario No. 2

I also plan to buy the pound if there are two consecutive tests of the 1.3470 level while the MACD indicator is in oversold territory. This would limit downward potential and lead to a reversal upward. In this case, growth toward 1.3485 and 1.3520 can be expected.

Sell Signal

Scenario No. 1

I plan to sell the pound after a break below the 1.3470 level (red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers is 1.3437, where I will exit shorts and immediately open long positions in the opposite direction (expecting a 20–25 point rebound). Pressure on the pound may return today if negotiations fail.

Important: Before selling, make sure the MACD indicator is below the zero line and has just begun falling from it.

Scenario No. 2

I also plan to sell the pound if there are two consecutive tests of the 1.3485 level while the MACD indicator is in overbought territory. This would limit upward potential and lead to a downward reversal. A decline toward 1.3470 and 1.3437 can be expected.

What Is on the Chart

• Thin green line – entry price for buying the instrument
• Thick green line – estimated Take Profit level or area for manually locking in profits, since further growth above this level is unlikely
• Thin red line – entry price for selling the instrument
• Thick red line – estimated Take Profit level or area for manually locking in profits, since further decline below this level is unlikely
• MACD indicator – when entering trades, it is important to consider overbought and oversold zones

Important Notice

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

And remember: successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based solely on current market conditions are, from the outset, a losing strategy for intraday traders.