Trade Analysis and Recommendations for the British Pound

The test of 1.2592 occurred when the MACD indicator had just started moving up from the zero mark, confirming the correct entry point. As a result, the pair rose by 15 points, after which demand for the pound weakened.

The lack of UK economic data did not help the pound recover, shifting the market's focus to U.S. economic releases. Market attention is now on upcoming U.S. inflation data, which could significantly influence the dollar's trajectory. Persistently high inflation may prompt the Federal Reserve to maintain a more aggressive policy stance, strengthening the dollar. Conversely, weaker macroeconomic data could pressure the dollar, opening opportunities for a pound recovery.

The Core Personal Consumption Expenditures (PCE) Index will provide valuable insights into inflation and consumer sentiment. Changes in consumer spending and income levels will help assess the overall economic condition and purchasing power. The U.S. goods trade balance will reflect the difference between exports and imports, indicating the competitiveness of U.S. manufacturers and overall dollar demand. Strong data in these areas may lead to a dollar rally, pushing GBP/USD lower.

Additionally, the Chicago PMI, which measures business activity in the region, serves as a key national economic indicator. A reading below 50 points would indicate a contraction in production, potentially weakening the dollar further.

For my intraday strategy, I will primarily focus on Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: I plan to buy the pound today if the price reaches 1.2605 (green line on the chart), aiming for growth toward 1.2635. At 1.2635, I will exit long positions and initiate short trades in the opposite direction, expecting a 30-35 point pullback. The pound's upward momentum today depends on weak U.S. economic data. Important! Before buying, confirm that the MACD indicator is above the zero mark and just starting to rise.

Scenario #2: Another buying opportunity will arise if the price tests 1.2588 twice while the MACD indicator is in oversold territory. This will limit the pair's downward potential and trigger a reversal upward, targeting resistance levels of 1.2605 and 1.2635.

Sell Signal

Scenario #1: I plan to sell the pound once it breaks below 1.2588 (red line on the chart), expecting a quick decline. The key target for sellers will be 1.2561, where I will exit short positions and immediately buy in the opposite direction, anticipating a 20-25 point rebound. Sellers will become more active in response to strong U.S. economic data. Important! Before selling, confirm that the MACD indicator is below the zero mark and just beginning its downward movement.

Scenario #2: I will also consider selling the pound if 1.2605 is tested twice, while the MACD indicator is in overbought territory. This will limit the pair's upward potential and trigger a market reversal downward, with a target at 1.2588 and 1.2561.

Chart Legend:

• Thin green line – entry price for buying the asset.
• Thick green line – expected price where Take Profit orders or manual profit-taking should be considered, as further growth above this level is unlikely.
• Thin red line – entry price for selling the asset.
• Thick red line – expected price where Take Profit orders or manual profit-taking should be considered, as further declines below this level are unlikely.
• MACD Indicator – essential for determining overbought and oversold market conditions.

Important: Beginner forex traders should exercise caution when making market entries. Before major fundamental reports, it is best to stay out of the market to avoid sudden price fluctuations. If trading during high-impact news releases, always use stop-loss orders to minimize potential losses. Without stop-loss protection, traders risk losing their entire deposit quickly, especially when trading large volumes without proper money management.

For successful trading, having a clear trading plan is crucial, as demonstrated in the strategies above. Spontaneous trading decisions based on market fluctuations often result in losses for intraday traders.