Trade Review and Tips for Trading the British Pound

The test of the 1.3382 price level occurred when the MACD indicator was just beginning to move downward from the zero mark, confirming a correct entry point for selling the pound. However, the trade resulted in a loss, as the pair did not actually decline afterward.

The absence of important data from the UK allowed the pound to gain slightly against the U.S. dollar. Market conditions remain relatively uncertain, as investors are primarily focused on macroeconomic data from other regions, especially the United States. Despite some positive momentum, the British currency remains under pressure from expectations regarding future geopolitical developments in the Middle East. The U.S. dollar, in turn, shows mixed dynamics. On one hand, anticipation of key U.S. releases such as GDP and the Personal Consumption Expenditures (PCE) index supports optimism. On the other hand, the absence of clear negative news on Iran slightly weakens the dollar.

As previously noted, key macroeconomic indicators are upcoming, which will allow assessment of the current state and dynamics of the U.S. economy. First in line are weekly initial jobless claims. This indicator, tracked weekly, is highly sensitive to labor market changes. A sharp rise in claims could signal accelerating layoffs and deteriorating employment conditions. Next, we will consider the U.S. GDP change for Q4 2025. These quarterly data provide a broader perspective on economic growth. Positive GDP growth reflects expanding economic activity.

Special attention will be given to the U.S. Core PCE index. This measure is the Federal Reserve's preferred inflation gauge, as it covers a wider range of goods and services than the Consumer Price Index and accounts for shifts in consumer preferences.

For intraday trading, I will rely primarily on Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy the pound today upon reaching the entry level around 1.3417 (green line on the chart), with a target of 1.3448 (thicker green line). Around 1.3448, I will exit long positions and open sales in the opposite direction (expecting a 30–35 point move). Pound gains today are expected within a bullish market. Important: Before buying, ensure the MACD indicator is above zero and just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound if there are two consecutive tests of the 1.3395 level while the MACD indicator is in the oversold area. This will limit downward potential and trigger a reversal upward. Expected targets are 1.3417 and 1.3448.

Sell Signal

Scenario No. 1: I plan to sell the pound after it breaches 1.3395 (red line on the chart), which should lead to a quick decline. The key target for sellers is 1.3356, where I will exit and immediately consider buying in the opposite direction (expecting a 20–25 point move). Pressure on the pound will return if U.S. data is strong.Important: Before selling, ensure the MACD indicator is below zero and just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound if there are two consecutive tests of 1.3417 while the MACD indicator is in the overbought area. This will limit upward potential and trigger a reversal downward. Expected targets are 1.3395 and 1.3356.

Chart Notes

• Thin green line – entry price for buying
• Thick green line – suggested Take Profit level or area to lock in profits, as further growth above this level is unlikely
• Thin red line – entry price for selling
• Thick red line – suggested Take Profit level or area to lock in profits, as further decline below this level is unlikely
• MACD indicator – pay attention to overbought and oversold zones when entering trades

Important: Beginner Forex traders should exercise extreme caution when entering the market. It is best to stay out of the market before major fundamental reports to avoid sudden price swings. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit—especially if you do not use proper money management and trade large volumes.

Remember, successful trading requires a clear trading plan like the one outlined above. Making spontaneous decisions based on current market conditions is a losing strategy for intraday traders.