Trade Analysis and Recommendations for the British Pound

The test of the price level at 1.3353 coincided with the moment when the MACD indicator had already moved significantly above the zero mark, which limited the pair's upside potential. For this reason, I did not buy the pound. A second test at 1.3353 occurred while the MACD was in the overbought area, allowing the execution of Scenario No. 2: selling the pound. As a result, the pair declined by 15 pips.

In the afternoon, the core Personal Consumption Expenditures (PCE) index, along with data on changes in personal spending and income, is expected to be released. Shortly afterward, figures for the University of Michigan Consumer Sentiment Index and inflation expectations from the University of Michigan will be published. The Federal Reserve closely monitors the PCE index as a key inflation indicator. Today's data is expected to provide a clearer picture of the inflation trajectory and could influence the Fed's future interest rate decisions. If the PCE index comes out above expectations, it may heighten concerns about persistent inflation and prompt the Fed to continue its aggressive policy. Conversely, a lower figure may indicate weakening inflationary pressure, allowing the Fed to take a more dovish stance. Data on changes in consumer spending and income will complement the picture of consumer demand. It is worth noting that market reactions could be significant, especially if the data deviates substantially from expectations.

Regarding the intraday strategy, I will focus on implementing Scenarios 1 and 2.

Buy Signal

Scenario No. 1: I plan to buy the pound today upon reaching an entry price around 1.3355 (green line on the chart), targeting a move to 1.3384 (thicker green line on the chart). At around 1.3384, I will exit my long positions and sell immediately in the opposite direction, anticipating a movement of 30-35 pips from the entry point. A strong increase in the pound today can only be expected after weak US data. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting to rise from it.

Scenario No. 2: I also plan to buy the pound today if there are two consecutive tests of 1.3336 while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. We can expect growth toward opposing levels of 1.3355 and 1.3384.

Sell Signal

Scenario No. 1: I plan to sell the pound today after the pair trades above the 1.3336 level (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the level of 1.3309, where I intend to exit my shorts and immediately buy in the opposite direction, aiming for a movement of 20-25 pips in the opposite direction from that level. Pressure on the pound is unlikely to return today. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting to decline from it.

Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of 1.3355 while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. We can expect a decline to the opposing levels of 1.3336 and 1.3309.

Chart Highlights:

• Thin Green Line: Entry price for buying the trading instrument.
• Thick Green Line: Suggested price for placing a Take Profit or securing a profit, as further growth above this level is unlikely.
• Thin Red Line: Entry price for selling the trading instrument.
• Thick Red Line: Suggested price for placing a Take Profit or securing a profit, as further decline below this level is unlikely.
• MACD Indicator: It is important to use oversold and overbought zones when entering the market.

Important:

Beginner traders in the Forex market need to be very cautious when making decisions to enter the market. It is best to stay out of the market before the release of significant fundamental reports to avoid sharp fluctuations in the exchange rate. 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 do not use money management and trade large volumes.

Remember that successful trading requires a clear trading plan, like the one presented above. Impulsive trading decisions based on the current market situation are fundamentally a losing strategy for intraday traders.