Trade Review and Tips for the British Pound

The test of the 1.3510 price level coincided with the MACD indicator just beginning to move upward from the zero line, which confirmed the correct entry point for buying the pound and resulted in the pair's rise by more than 20 points.

In the second half of the day, the focus shifts to U.S. data on building permits and housing starts. These indicators, traditionally regarded as leading indicators, provide insight into the future state of the housing market and, more broadly, overall economic activity. An increase in building permits signals growing optimism among developers and potential buyers, pointing to an expected rise in construction volumes in the coming months. Housing starts reflect current confidence in housing demand. Growth in this figure suggests that developers are ready to invest in new projects, anticipating their successful implementation.

Another important event will be the speech of FOMC member Michelle Bowman. Investors will pay close attention to her comments regarding the future course of interest rates and inflation forecasts. The market will react sensitively to any signs that could shed light on possible adjustments to the Federal Reserve's monetary policy.

As for the intraday strategy, I will rely mainly on the implementation of scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound upon reaching the entry point around 1.3529 (green line on the chart) with a target of 1.3550 (thicker green line on the chart). Around 1.3550, I will exit long positions and open short positions in the opposite direction (expecting a 30–35-point pullback from the level). A strong rally in the pound is unlikely today. Important! Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2: I also plan to buy the pound if there are two consecutive tests of the 1.3512 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal upward. A rise toward the opposite levels of 1.3529 and 1.3550 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound after updating the 1.3512 level (red line on the chart), which will lead to a quick decline of the pair. The key target for sellers will be 1.3489, where I will exit short positions and immediately open long positions in the opposite direction (expecting a 20–25-point rebound from the level). Sellers may push the pound even lower, but strong U.S. data will be needed. Important! Before selling, make sure the MACD indicator is below the zero line and just starting to decline from it.

Scenario #2: I also plan to sell the pound if there are two consecutive tests of the 1.3529 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.3512 and 1.3489 can be expected.

Chart Notes:

• Thin green line – entry price for buying the instrument;
• Thick green line – assumed price where Take Profit can be placed or profits fixed manually, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – assumed price where Take Profit can be placed or profits fixed manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to use overbought and oversold zones.

Important: Beginner Forex traders must be very cautious when making entry decisions. Before the release of major fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during news releases, always use stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you trade large volumes without money management.

And remember, successful trading requires having a clear trading plan, such as the one I outlined above. Making spontaneous trading decisions based only on the current market situation is initially a losing strategy for an intraday trader.