Analysis of Trades and Trading Tips for the British Pound

The price test at 1.2664 occurred when the MACD had just begun to move downward from the zero mark, confirming the optimal entry point for selling the British pound. Consequently, the pair declined toward the target level of 1.2636.

Stronger-than-expected U.S. economic data, which indicated rising inflation, along with Trump's comments on trade tariffs, pressured the British pound while strengthening the U.S. dollar. The market responded immediately, pricing in the likelihood of a more aggressive trade policy from the White House. Investors, concerned about potential rate cuts by the Bank of England, adjusted their portfolios by shifting away from risk assets and toward the safe-haven dollar.

Additionally, Trump is intensifying market anxiety by threatening new trade barriers, raising concerns about a global economic slowdown and increasing demand for the dollar as a safe-haven asset. The risk of escalating trade wars is making investors cautious, leading them to avoid assets sensitive to international trade.

No UK economic data is scheduled for release today, so a strong pound recovery in the first half of the day is unlikely. It is better to trade in line with the existing downward trend, which may intensify towards the end of the month.

I will rely primarily on Scenario #1 and Scenario #2 for today's intraday strategy.

Buy Signal

Scenario #1: Buying the pound at 1.2592 (green line on the chart) with a target of 1.2621 (thicker green line on the chart). At 1.2621, I plan to exit the trade and sell in the opposite direction, expecting a 30-35 pip retracement. Pound strength will likely be limited to a corrective rebound. Before buying, ensure the MACD indicator is above zero and just starting to rise.

Scenario #2: Another buying opportunity arises if the price tests 1.2578 twice while the MACD is in oversold territory. This would limit the pair's downside potential and trigger a reversal to the upside. A rise to the opposite levels of 1.2592 and 1.2621 can be expected.

Sell Signal

Scenario #1: Selling the pound after breaking below 1.2578 (the red line on the chart) could lead to a quick decline. The key target for sellers is 1.2552, where I plan to exit and immediately buy in the opposite direction, expecting a 20-25 pip reversal. It's best to sell the pound at higher levels. Before selling, ensure the MACD indicator is below zero and beginning to decline.

Scenario #2: Selling is planned if the price tests 1.2592 twice while the MACD is overbought territory. This would limit the pair's upside potential and lead to a downward reversal. A decline to the opposite level of 1.2578 and 1.2552 can be expected.

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.