Trade Review and Tips for Trading the British Pound

The price test at 1.3249 occurred as the MACD indicator began moving down from the zero line, confirming a valid entry point to sell the pound. However, the pair did not subsequently fall.

Yesterday the pound received brief support after remarks by Bank of England official David Ramsden, but the currency failed to hold the gains. Ramsden openly said the central bank could raise rates if inflationary pressure continued to build, and that wording was hawkish enough for the market. The effect, however, was short-lived. Later in the day, similarly hawkish comments from Federal Reserve representatives quickly nullified the morning's impulse for the pound. In the moment, dollar hawkishness outweighed the BoE signals, and GBP/USD was back under seller pressure. In my view, this episode shows that even clearly positive statements for the pound do not guarantee a sustained rally.

Today's mortgage and consumer-credit data will most likely show a slowdown, reflecting a cooling housing market and borrower caution amid high rates. M4 money-supply figures are also unlikely to surprise, as money-supply growth remains restrained. However, these indicators are secondary and will not determine the pair's short-term dynamics. The key event will be a speech by Catherine Mann. Her rhetoric is traditionally hawkish, which has supported the pound before. If she reaffirms commitment to fighting inflation and signals the need to keep policy restrictive longer than the market expects, that could trigger another wave of sterling buying.

If the positive backdrop holds, the pound could test local highs, but a larger move higher would require supportive macro data.

For intraday strategy, I will mainly rely on executing Scenarios No. 1 and No. 2.

Buy Scenarios

No 1: I plan to buy the pound today around 1.3245 (green line on the chart) with a target of 1.3265 (thicker green line on the chart). Around 1.3265, I plan to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip counter-move). Expect pound gains today only after a hawkish stance from policymakers. Important: before buying, ensure the MACD is above zero and has just begun to rise.

No 2: I also plan to buy the pound if the price tests 1.3233 twice in a row while MACD is in the oversold area. This would limit the pair's downside potential and trigger an upward reversal. Expect moves to 1.3245 and 1.3265.

Sell Scenarios

No 1: I plan to sell the pound after the 1.3233 level is breached (red line on the chart), which should lead to a rapid decline. The sellers' key target will be 1.3215, where I plan to exit shorts and immediately open longs in the opposite direction (expecting a 20–25 pip counter-move). Bad news will put pressure back on the pound. Important: before selling, ensure the MACD is below zero and has just begun falling.

No 2: I also plan to sell the pound if the price tests 1.3245 twice in a row while MACD is in the overbought area. This would limit upside potential and trigger a reversal downward. Expect declines toward 1.3233 and 1.3215.

What to Look for on the Chart:

• Thin Green Line – Entry price at which you can buy the trading instrument;
• Thick Green Line – Estimated price where you can set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin Red Line – Entry price at which you can sell the trading instrument;
• Thick Red Line – Estimated price where you can set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it's important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to stay out of the market ahead of significant fundamental reports to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not employ money management practices and trade large volumes.

Also, remember that successful trading requires a clear trading plan, similar to the one provided above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.