Trade Analysis and Advice for Trading the British Pound

The price test at 1.3370 occurred when the MACD indicator had moved far below the zero line, which limited the pair's downward potential. For this reason, I did not sell the pound and missed the strong drop.

News that the UK Consumer Price Index fell by 0.2% in November caused the pound to weaken. Weaker-than-expected inflation heightened concerns about slowing economic growth in the country and potential pressure on the Bank of England to ease monetary policy. Investors seeking higher returns began selling pounds, switching to assets offering more attractive prospects.

During the U.S. session, attention will focus on speeches by FOMC members. If they adopt a dovish stance, pressure on the dollar will ease. Otherwise, if the Fed's rhetoric is more cautious, the dollar may gain support, potentially triggering a new wave of GBP/USD declines—especially ahead of tomorrow's Bank of England monetary policy meeting.

For intraday strategy, I will mainly rely on Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today around the entry point of 1.3336 (green line on the chart) with a target of 1.3354 (thicker green line on the chart). Around 1.3354, I will exit purchases and open sales in the opposite direction (expecting a 30–35 point move from the level). Growth in the pound today can only be expected after a dovish stance from the Fed. Important: Before buying, ensure the MACD indicator is above zero and just beginning to rise.

Scenario #2: I also plan to buy the pound if the price tests 1.3320 twice consecutively while the MACD is in the oversold zone. This limits downward potential and should trigger a market reversal upward. Expected targets are 1.3336 and 1.3354.

Sell Signal

Scenario #1: I plan to sell the pound after it breaks 1.3320 (red line on the chart), which will trigger a rapid drop. The key target for sellers is 1.3295, where I will exit sales and immediately open purchases in the opposite direction (expecting a 20–25 point move from the level). Selling pressure on the pound can return at any time. Important: Before selling, ensure the MACD is below zero and just beginning to decline.

Scenario #2: I also plan to sell the pound if the price tests 1.3336 twice consecutively while the MACD is in the overbought zone. This limits upward potential and should trigger a market reversal downward. Expected targets are 1.3320 and 1.3295.

Chart Explanation

• Thin green line: Entry price for buying the instrument.
• Thick green line: Suggested Take Profit or level to secure profits, as further growth above this point is unlikely.
• Thin red line: Entry price for selling the instrument.
• Thick red line: Suggested Take Profit or level to secure profits, as further decline below this point is unlikely.
• MACD indicator: Use overbought and oversold zones when entering trades.

Important. Beginner Forex traders need to make their entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid falling into sharp fluctuations in the exchange rate. If you decide to trade during the news release, always place stop orders to minimize losses. Without placing stop orders, you can lose your entire deposit very quickly, especially if you do not use money management, but trade in large volumes.

And remember that for successful trading it is necessary to have a clear trading plan, following the example of the one I presented above. Spontaneous trading decision-making based on the current market situation is an inherently losing strategy for an intraday trader.