Analysis of Trades and Trading Tips for the British Pound

The test of the price level at 1.3458 coincided with the moment when the MACD indicator had already moved significantly down from the zero mark, which limited the pair's downward potential.

The dollar strengthened its position against the pound amid a new standoff between the US and Iran. Tensions in the Middle East typically boost demand for the US dollar as a safe-haven currency. The recent data on US job openings for April also supported the dollar, as it rose to 7.618 million. This figure is an important indicator of the health of the US labor market and comes ahead of the ADP report.

This morning, in the first half of the day, significant data for the British economy is expected. Specifically, the May figures for the UK services PMI index and the composite PMI index are on the agenda. Economists forecast that the index will remain below the 50-point mark, indicating negative sentiment. The current situation suggests a slowdown in the British economy's growth rate. A PMI index value below 50 traditionally signals a contraction in business activity within the relevant sector. In the services sector, a key driver of the British economy, this could have far-reaching consequences, affecting consumer demand, employment levels, and investment activity.

Regarding the intraday strategy, I will focus more on implementing scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy the pound today when the price reaches around 1.3468 (the green line on the chart), with a target price of 1.3508 (the thicker green line on the chart). At the 1.3508 level, I intend to exit my long positions and open short positions in the opposite direction (expecting a move of 30-35 pips back from that level). One can only expect strong pound growth today following good data. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy the pound today if there are two consecutive tests of the price 1.3452 when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upwards. Growth can be expected towards the opposing levels of 1.3468 and 1.3508.

Sell Scenarios

Scenario #1: I plan to sell the pound today after it breaks below 1.3452 (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 1.3412 level, where I intend to exit my shorts and immediately buy back in the opposite direction (expecting a 20-25-pip move back from the level). Pressure on the pound will return in case of weak data. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario #2: I also plan to sell the pound today if the price tests 1.3468 twice in a row, when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downwards. A decrease can be expected towards the opposing levels of 1.3452 and 1.3412.

What's on the Chart:

Thin green line – entry price for buying the trading instrument;

Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;

Thin red line – entry price for selling the trading instrument;

Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;

MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. 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 are not using money management and are trading large volumes.

And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.