Trade Analysis and Advice for the British Pound

The test of the price at 1.3340 occurred when the MACD indicator was just beginning to turn downward from the zero mark, confirming a valid entry point to sell the pound. As a result, the pair declined by 35 pips.

Yesterday's trading was marked by a notable decline in the British pound against the US dollar, following the Federal Reserve's decision to keep interest rates unchanged. This move by the US central bank confirmed its commitment to a fairly hawkish monetary policy, putting downward pressure on riskier assets, including the pound. Against the backdrop of ongoing uncertainty spurred by the conflict in the Middle East, Fed Chair Jerome Powell emphasized key factors influencing future rate decisions, highlighting inflation related to energy prices, traditionally a volatile component of overall inflationary pressure.

Today, financial activity promises to be particularly lively, especially for traders focused on the UK. During the first half of the day, attention will be directed to two crucial macroeconomic indicators: new unemployment benefit claims and the overall unemployment rate. These reports will provide insight into the current state of the British labor market, which is a significant indicator of the nation's overall economic health.

Simultaneously with the release of these data, the financial community will await the Bank of England's decision regarding the key interest rate. Given current economic conditions and the priority of controlling inflation, most economists expect the BoE to keep interest rates unchanged. However, the results of the voting and the Bank's comments on future prospects may send significant signals to the markets.

Regarding the intraday strategy, I will rely more on implementing scenarios #1 and #2.

Buy Scenarios

• Scenario #1: I plan to buy the pound today upon reaching the entry point around 1.3278 (the green line on the chart), with a target for growth to 1.3313 (the thicker green line on the chart). At the level of 1.3313, I plan to exit the market and also sell pounds in the opposite direction (expecting a movement of 30-35 pips back from the entry point). It is reasonable to expect the pound to rise today following the BoE's hawkish stance. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.
• Scenario #2: I also plan to buy the pound today if the price tests 1.3257 twice in a row while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth to the opposite levels of 1.3278 and 1.3313 can be expected.

Sell Scenarios

• Scenario #1: I plan to sell the pound today after updating the level to 1.3257 (the red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be the 1.3221 level, where I plan to exit the short positions and immediately open longs in the opposite direction (expecting a 20-25-pip move back from the level). Weak UK data could put pressure on the pair. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline from it.
• Scenario #2: I also plan to sell the pound today if two consecutive tests of 1.3278 occur 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 decrease to the opposite levels of 1.3257 and 1.3221 can be expected.

What's on the Chart:

• The thin green line represents the entry price at which you can buy the trading instrument;
• The thick green line is the assumed price where you can set Take Profit or manually take profit, as further growth above this level is unlikely;
• The thin red line indicates the entry price at which you can sell the trading instrument;
• The thick red line is the assumed price where you can set Take Profit or manually take profit, as further decline below this level is unlikely;
• The MACD indicator. When entering the market, it's important to refer to the overbought and oversold zones.

Important: Beginner traders in the forex market need to make entry decisions very carefully. It is best to stay out of the market before the release of important fundamental reports to avoid sharp fluctuations in prices. If you choose to trade during the release of news, always set Stop Loss orders to minimize losses. Without placing Stop Loss orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember, successful trading requires a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.