Trade Analysis and Tips for Trading the British Pound

The test of the 1.3309 level occurred when the MACD indicator had just started to move downward from the zero mark, confirming a valid entry point for selling the pound and resulting in a 15-point drop.

The rise in retail sales in the UK, according to data from the Confederation of British Industry, triggered minor pound buying, limiting the pair's downward potential at the start of the European session. Despite a brief surge of optimism fueled by the unexpected increase in retail sales, it would be premature to draw far-reaching conclusions. The Bank of England is seriously considering returning to a rate-cutting trajectory, which will continue to limit the pound's upward potential.

In the second half of the day, focus should shift from macroeconomic indicators to more specific factors such as U.S. trade policy. Any statements from Trump or White House officials regarding tariffs could influence the dollar, so it's better to pay close attention to such developments.

As for intraday strategy, I will rely more heavily on the execution of Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound upon reaching the entry point around 1.3352 (green line on the chart) with the target of rising to 1.3404 (thicker green line on the chart). Around 1.3404, I plan to exit long positions and open short positions (expecting a 30–35 point move in the opposite direction). Pound growth today may continue the morning's trend. Important! Before buying, make sure the MACD indicator is above the zero mark and is just starting to rise.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.3328 level while the MACD is in the oversold area. This will limit the pair's downward potential and trigger a market reversal upward. Growth toward the opposite levels of 1.3352 and 1.3404 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after breaking below 1.3328 (red line on the chart), which would lead to a rapid decline of the pair. Sellers' primary target will be the 1.3287 level, where I plan to exit short positions and immediately open long positions (targeting a 20–25 point move in the opposite direction). Sellers are unlikely to be very active today. Important! Before selling, make sure the MACD indicator is below the zero mark and is just starting to decline.

Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.3352 level while the MACD is in the overbought area. This will limit the pair's upward potential and trigger a downward market reversal. A decline toward the opposite levels of 1.3328 and 1.3287 can be expected.

Chart Overview:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – suggested Take Profit level or recommended area to lock in profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – suggested Take Profit level or recommended area to lock in profits, as further decline below this level is unlikely;
• MACD Indicator – when entering the market, it is important to rely on overbought and oversold zones.

Important: Beginner traders in the Forex market must be extremely cautious when making market entry decisions. It is best to stay out of the market ahead of major fundamental reports to avoid getting caught in sharp price swings. If you choose to trade during news releases, always place stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly lead to the loss of the entire deposit, especially if you do not apply sound money management and trade large volumes. And remember: for successful trading, you must have a clear trading plan, like the one outlined above. Spontaneous trading decisions based on the current market situation are fundamentally a losing strategy for intraday traders.