Trade review and trading tips for the British pound

A test of the 1.3448 price level occurred when the MACD indicator had already moved well below the zero line, which limited the pair's downward potential. For this reason, I did not sell the pound.

A sharp drop in the UK house price index led to a decline in the British pound. Investors reacted immediately to the alarming signals coming from the real estate market, which has traditionally been considered one of the pillars of the UK economy. Overall, a combination of factors triggered this situation. First and foremost, these include high interest rates set by the Bank of England. The situation is further aggravated by the fact that the housing market had been overheated for a long time. The continuous price growth observed in recent years did not correspond to real household incomes. The decline therefore became an inevitable correction, which, unfortunately, has a negative impact on the economy as a whole.

Later in the day, data on weekly U.S. initial jobless claims, the trade balance, and consumer credit will be released. Traders always study these figures closely to assess the current state of the U.S. economy and forecast further actions by the Federal Reserve regarding interest rates. Initial jobless claims are an important indicator of labor market conditions. An increase in this figure may signal a slowdown in economic growth and a potential decline in consumer spending. The trade balance reflects the difference between exports and imports of goods and services. A negative balance may weigh on economic growth, as it indicates that the country imports more than it exports. However, for the United States, such a situation is quite normal. Taken together, these data will help form a more complete picture of the current U.S. economic situation and assess the prospects for its further development. Market reaction to the release of these indicators may be highly volatile, so traders are advised to exercise caution.

As for the intraday strategy, I will mainly rely on the implementation of scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy the pound if the price reaches the entry area around 1.3455 (green line on the chart), targeting a rise toward 1.3489 (the thicker green line on the chart). Around 1.3489, I will exit long positions and open short positions in the opposite direction, aiming for a 30–35 point move from the level. A rise in the pound today can be expected only if U.S. data are very weak.Important! Before buying, make sure the MACD indicator is above the zero line and is just starting to rise from it.

Scenario No. 2: I also plan to buy the pound today in the event of two consecutive tests of the 1.3435 level when the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to a reversal upward. A move toward the opposite levels of 1.3455 and 1.3489 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound today after a breakout below the 1.3435 level (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be 1.3405, where I plan to exit short positions and immediately open long positions in the opposite direction, aiming for a 20–25 point move from the level. Selling pressure on the pound may return today in the event of strong U.S. data.Important! Before selling, make sure the MACD indicator is below the zero line and is just starting to move downward from it.

Scenario No. 2: I also plan to sell the pound today in the event of two consecutive tests of the 1.3455 level when the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.3435 and 1.3405 can be expected.

What's on the chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the projected price level where Take Profit orders can be placed or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the projected price level where Take Profit orders can be placed or profits can be taken manually, 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 should be extremely cautious when making market entry decisions. Ahead 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 place stop-loss orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

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