Analysis of Trades and Trading Tips for the British Pound

The first test of the 1.2679 level occurred when the MACD indicator had already moved significantly above the zero mark, limiting the pair's upward potential. For this reason, I chose not to buy the pound. The second test of 1.2679 took place shortly afterward, when the MACD was in the overbought area, which allowed for a second selling scenario. However, losses were incurred as the price failed to move downward.

Yesterday's positive data on manufacturing activity in the UK helped the pound to rise in the first half of the day, while weak US data pressured the dollar, leading to additional GBP/USD purchases. However, it's important to note that the UK economy still faces significant challenges related to high energy prices and inflation. At the same time, the US dollar may find support today if geopolitical tensions worsen or if new signs of accelerating inflation emerge in the UK. As a result, the future movement of GBP/USD will depend on the balance between monetary policy expectations and macroeconomic factors in both regions.

There are no UK economic reports scheduled for today, so after a slight correction, the pound may continue its upward movement. However, any positive comments from the Bank of England or indications of a potential interest rate cut could restrict the pair's growth potential.

For intraday strategy, I will focus more on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today if the price reaches the entry point around 1.2705 (green line on the chart), targeting a rise to 1.2738 (thicker green line on the chart). Around 1.2738, I intend to exit long positions and open sell trades in the opposite direction, expecting a 30-35 pip downward movement from this level. A continued upward movement in the pound could support this scenario. Important! Before buying, ensure that the MACD indicator is above the zero mark and beginning to rise.

Scenario #2: I also plan to buy the pound today if the price tests 1.2679 twice a row while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth can be expected toward the opposite levels of 1.2705 and 1.2738.

Sell Signal

Scenario #1: I plan to sell the pound today after the 1.2679 level is updated (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be 1.2645, where I plan to exit short positions and immediately open long trades in the opposite direction, expecting a 20-25 pip upward movement from this level. Selling the pound at the highest possible price is preferable. Important! Before selling, ensure that the MACD indicator is below the zero mark and beginning to decline.

Scenario #2: I also plan to sell the pound today if the price tests 1.2705 twice in a row while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline can be expected toward the opposite levels of 1.2679 and 1.2645.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.