Analysis of Trades and Trading Tips for the British Pound

The test of the 1.2655 price level occurred when the MACD indicator was just starting to rise from the zero mark, confirming a strong entry point for buying the pound. However, as shown on the chart, the pair did not experience significant growth, leading to locked-in losses.

The relatively modest data on UK manufacturing PMI and services PMI limited the pound's growth on Friday. Nevertheless, the overall outlook for the pound remains positive. Despite fluctuations, it continues to receive support from big buyers, even in light of expectations for Bank of England rate cuts.

Today, the market will focus on the rhetoric of BoE representatives regarding inflation and the future outlook for interest rate hikes. Investors will look for hints about how quickly the BoE intends to ease its tight monetary policy. More hawkish statements, implying a longer period of high rates, could support the pound, while dovish signals indicating imminent rate cuts may lead to its weakening.

Of particular interest is Swati Dhingra's stance, known for her cautious approach to rate hikes. Her comments will be closely analyzed for any potential shift in her position influenced by the latest economic data. Any change in her rhetoric could significantly impact market expectations.

For intraday strategy, I will focus more on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today if the entry point reaches around 1.2682 (green line on the chart), targeting a rise to 1.2730 (thicker green line on the chart). Around 1.2730, I plan to exit purchases and open sell positions in the opposite direction, aiming for a downward movement of 30-35 pips. The pound's growth can be expected following hawkish statements. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning its upward movement.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the 1.2654 price level while the MACD indicator is in the oversold zone. This will limit the pair's downside potential and lead to a market reversal to the upside. Growth toward the 1.2682 and 1.2730 levels can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after the price breaks below the 1.2654 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 1.2611, where I plan to exit short positions and immediately open long positions in the opposite direction, aiming for a movement of 20-25 pips upward. It is best to sell the pound as high as possible. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning its downward movement.

Scenario #2: I also plan to sell the pound today if there are two consecutive tests of the 1.2682 price level while the MACD indicator is in the overbought zone. This will limit the pair's upside potential and lead to a market reversal to the downside. A decline toward the 1.2654 and 1.2611 levels can be expected.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.