Review of Trades and Trading Recommendations for the British Pound

The test of the 1.2975 level occurred when the MACD indicator had already moved significantly below the zero mark, which limited the pair's downward potential. For this reason, I did not sell the pound. The second test of 1.2975, when the MACD was in the oversold zone, triggered Scenario #2 for buying. However, as seen on the chart, the expected growth did not materialize.

Clearly, the market has entered a wait-and-see mode ahead of the FOMC rate decision and comments on future monetary policy. Many investors expect signals of further rate cuts, which would support the slowing US economy. However, any hints of a more dovish stance could boost the pound, while a hawkish tone from the Fed could increase pressure on the British currency. Technical analysis suggests that the current correction is temporary. The pound remains in an uptrend, and a break above 1.3000 could trigger another bullish rally.

For my intraday strategy, I will focus on Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: I plan to buy the pound today when the price reaches 1.2978 (green line on the chart), targeting an increase to 1.3011 (thicker green line). At 1.3011, I will exit my long positions and open short positions in the opposite direction, aiming for a 30-35 point downward correction. A continued uptrend is expected to support further GBP growth. Important! Before buying, make sure that the MACD indicator is above zero and just beginning to rise.

Scenario #2: I also plan to buy the pound if there are two consecutive tests of 1.2953, when the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger a market reversal to the upside. In this case, I expect a rise to the opposite levels of 1.2978 and 1.3011.

Sell Signal

Scenario #1: I plan to sell the pound after it breaks below 1.2953 (red line on the chart), which should trigger a rapid decline. The key target for sellers will be 1.2924, where I will exit my short positions and immediately buy in the opposite direction, expecting a 20-25 point rebound. Sellers will likely become more active if the Fed maintains a hawkish stance. Important! Before selling, ensure that the MACD indicator is below zero and just beginning to decline.

Scenario #2: I also plan to sell the pound if there are two consecutive tests of 1.2978, when the MACD indicator is in the overbought zone. This would limit the pair's upward potential and lead to a market reversal downward. In this case, I expect a decline to the opposite levels of 1.2953 and 1.2924.

Chart Explanation

• Thin green line – entry price for buying the instrument
• Thick green line – suggested Take Profit level or manual profit-taking zone, as further growth beyond this level is unlikely
• Thin red line – entry price for selling the instrument
• Thick red line – suggested Take Profit level or manual profit-taking zone, as further decline beyond this level is unlikely
• MACD Indicator – important to consider overbought and oversold zones before entering a trade

Important Notes

Beginner traders in the Forex market should exercise caution when making market entry decisions. Before major economic reports, it is best to stay out of the market to avoid sudden price swings. If you choose to trade during news releases, always set stop-loss orders to minimize risks. Trading without stop-loss protection can result in rapid capital losses, especially if money management is ignored and large position sizes are used.

Remember: Successful trading requires a clear and structured trading plan, similar to the one outlined above. Spontaneous trading decisions based on real-time price movements are a losing strategy for intraday traders.