Trade analysis and tips for trading the British pound

The test of the 1.3440 level occurred when the MACD indicator had just begun moving downward from the zero mark, confirming a correct entry point for selling the pound. As a result, the pair declined to the target level of 1.3408.

Today, the lack of economic statistics from the UK did not help the pound grow, resulting in a sell-off of the pair. However, important U.S. data is expected ahead. One of the most anticipated events will be the release of the Consumer Price Index (CPI) data for February. This indicator is the main measure of inflation and is closely monitored by the Federal Reserve when making monetary policy decisions. Any deviation from forecasts is expected to trigger increased market volatility. Higher inflation means a stronger dollar and a weaker British pound.

The Core CPI (excluding food and energy prices) is no less important. This indicator, which excludes the most volatile components, provides a more accurate picture of underlying inflation and is often considered by the Federal Reserve to be a more reliable benchmark. Its dynamics may shed light on the sustainability of inflationary trends.

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

Buy Signal

Scenario No. 1: Today I plan to buy the pound when the price reaches the entry point around 1.3442 (green line on the chart) with a target of 1.3476 (thicker green line on the chart). Around 1.3476, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move in the opposite direction from that level). Pound growth today can be expected after weak U.S. economic data.Important: Before buying, make sure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today if there are two consecutive tests of the 1.3424 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels 1.3442 and 1.3476 can then be expected.

Sell Signal

Scenario No. 1: Today I plan to sell the pound after the 1.3424 level is updated (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be 1.3375, where I will exit short positions and also open buy positions in the opposite direction (expecting a 20–25 point move upward from that level). Pressure on the pound may return at any moment today.Important: Before selling, make sure the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of the 1.3442 level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels 1.3424 and 1.3375 can then 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 estimated price where a Take Profit can be set or profits can be manually locked in, 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 estimated price where a Take Profit can be set or profits can be manually locked in, since further decline below this level is unlikely.
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important:Beginner Forex traders should make market entry decisions very cautiously. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop 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 with large volumes.

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