Analysis of Trades and Tips for Trading the British Pound:
The price test at 1.3412 occurred when the MACD indicator was just beginning to move down from the zero mark, confirming a valid entry point to sell the pound. As a result, the pair only declined by 7 pips.
Today, everyone will be watching the release of key UK economic indicators—the consumer price index and core CPI. These data are extremely important, as they directly affect the assessment of inflationary pressures in the country and, consequently, the Bank of England's future monetary policy decisions. If the actual inflation figures exceed economists' forecasts, the market will perceive this as a signal of heightened inflation risks. Such a scenario might complicate tomorrow's BoE meeting. The central bank will have to strike a balance between the need to combat rising inflation and the potential negative impact of higher interest rates on economic growth. In this situation, the likelihood of maintaining the current rate, or even raising it, could increase sharply, which, in turn, would affect the exchange rate of the British pound.
If the data falls within expectations or even below them, it could reduce the tension ahead of the BoE meeting. Conversely, this situation may give the central bank more room for maneuver and possibly support expectations of maintaining the rate.
As for the intraday strategy, I will primarily focus on implementing Scenarios #1 and #2.
Buy Scenarios
Scenario #1: I plan to buy the pound today at an entry point around 1.3434 (green line on the chart), with a growth target of 1.3467 (thicker green line on the chart). At around 1.3467, I intend to exit the long positions and open short positions in the opposite direction (anticipating a movement of 30-35 pips in the opposite direction from the level). Expecting growth from the pound today is possible after strong inflation figures. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting its upward movement from there.
Scenario #2: I also plan to buy the pound today in the event of two consecutive tests of 1.3406 while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. We can expect growth towards the opposite levels of 1.3434 and 1.3467.
Sell Scenarios
Scenario #1: I plan to sell the pound today after a break of the level at 1.3406 (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be level 1.3373, where I intend to exit the shorts and immediately buy back in the opposite direction (anticipating a movement of 20-25 pips in the opposite direction from the level). Low inflation will put pressure back on the pound. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting its downward movement from there.
Scenario #2: I also plan to sell the pound today in the event of two consecutive tests of 1.3434 while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. We can expect a decline towards the opposite levels of 1.3406 and 1.3373.
What's on the Chart:
Thin green line – entry price for buying the trading instrument;
Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;
Thin red line – entry price for selling the trading instrument;
Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;
MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.
Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.
And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.
