Review of trades and tips on trading the British pound

The test of the 1.3485 level occurred when the MACD indicator had already moved far below the zero mark, which limited the pair's downward potential. For this reason, I did not sell the pound.

Strong inflation data in the UK triggered buying of the pair, but the upward trend failed to continue. The momentum sparked by unexpectedly high figures proved short-lived, and the currency returned to previous levels, highlighting the ongoing uncertainty about the outlook for the British economy. In this complex situation, the future of the pound remains unclear. Much will depend on upcoming economic data, political decisions, and global factors such as developments in the world economy and geopolitical risks.

The release of the Fed meeting minutes and the speeches of FOMC members Christopher Waller and Raphael Bostic today will be decisive in the short term. Investors eagerly await details of the discussions regarding the future path of U.S. monetary policy. Special attention will be given to nuances related to inflation risks and labor market prospects. The minutes will provide deeper insight into the disagreements within the Federal Open Market Committee and help assess the Fed's readiness for further easing. Market participants will be looking for signals of a possible interest rate cut, which could weaken the dollar.

The speeches by Waller and Bostic will offer an opportunity to assess the current state of the economy from the perspective of individual Fed representatives. Their comments on inflation, economic growth, and employment prospects could significantly affect investor expectations and currency pair dynamics.

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

Buy Signal

Scenario #1: Today, I plan to buy the pound around the entry point of 1.3494 (green line on the chart), targeting growth toward 1.3598 (thicker green line on the chart). Around 1.3598, I will close purchases and open sales in the opposite direction, expecting a 30–35 point move down from that level. A stronger rally in the pound today may occur if Fed representatives take a dovish stance.Important! Before buying, make sure the MACD indicator is above zero and just starting to move upward.

Scenario #2: I also plan to buy the pound in case of two consecutive tests of the 1.3460 level when the MACD indicator is in the oversold area. This would limit the pair's downward potential and trigger a reversal upward. Growth toward 1.3494 and 1.3538 can then be expected.

Sell Signal

Scenario #1: Today, I plan to sell the pound after a breakout of the 1.3460 level (red line on the chart), which would trigger a quick decline in the pair. The key target for sellers will be 1.3426, where I will exit sales and also immediately open purchases in the opposite direction, expecting a 20–25 point rebound. Sellers may push the pound even lower, but this requires a hawkish Fed stance.Important! Before selling, make sure the MACD indicator is below zero and just starting to move downward.

Scenario #2: I also plan to sell the pound in case of two consecutive tests of the 1.3494 level when the MACD indicator is in the overbought area. This would cap the pair's upward potential and trigger a reversal downward. A decline toward 1.3460 and 1.3426 can then be expected.

Chart Notes

• Thin green line – entry price for buying the instrument;
• Thick green line – suggested level for placing Take Profit or fixing profit, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – suggested level for placing Take Profit or fixing profit, 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 Forex traders must be very cautious when making entry decisions. Ahead of major fundamental reports, it is best to stay out of the market to avoid sharp fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-losses, you can very quickly lose your entire deposit, especially if you ignore money management and trade large volumes.

And remember: successful trading requires a clear trading plan, like the one presented above. Spontaneous decisions based on the current market situation are by default a losing strategy for an intraday trader.