Trade Analysis and Tips for Trading the British Pound

The test of the 1.3237 level occurred when the MACD indicator had just begun moving upward from the zero line, confirming a valid entry point for buying the pound. As a result, the pair rose to around 1.3261.

The first half of the day was marked by the negative impact of weak UK Services PMI data on the GBP/USD pair; however, pound buyers managed to withstand the pressure. Traders appear to have temporarily set aside domestic UK economic concerns and shifted their focus back to the geopolitical arena, particularly the Middle East. Incoming signals and expectations regarding a possible resolution of the conflict between the US and Iran began to have a stabilizing effect on market sentiment. As the prospect of escalation fades and hopes for de-escalation come to the forefront, investors tend to reassess their positions. Expectations of a near-term easing of tensions in the Middle East—which could reduce risks for the global economy, including the UK—are supporting renewed demand for riskier assets, including the British pound. Thus, the pound's short-term weakness caused by local data has been temporarily offset by broader expectations tied to geopolitical stability.

In the second half of the day, traders' attention will be focused on further statements by US President Donald Trump regarding his stance on the conflict with Iran. Any comments from him could trigger volatility, as the market closely monitors developments in the Middle East and evaluates their potential impact on the global economy and commodity markets.

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

Buy Signal

Scenario No. 1: I plan to buy the pound today upon reaching the entry point around 1.3269 (green line on the chart), with a target of 1.3330 (thicker green line on the chart). Around 1.3330, I plan to exit long positions and open short positions in the opposite direction (expecting a move of 30–35 points). Pound growth today can be expected after weak US data.Important! Before buying, make sure the MACD indicator is above the zero line and just beginning to rise.

Scenario No. 2: I also plan to buy the pound if there are two consecutive tests of the 1.3245 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward reversal. Growth toward the opposite levels of 1.3269 and 1.3330 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound after a break below the 1.3245 level (red line on the chart), which could lead to a sharp decline. The key target for sellers will be 1.3186, where I plan to exit short positions and open long positions in the opposite direction (expecting a 20–25 point move). Pressure on the pound may return at any moment.Important! Before selling, make sure the MACD indicator is below the zero line and just beginning to decline.

Scenario No. 2: I also plan to sell the pound if there are two consecutive tests of the 1.3269 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.3245 and 1.3186 can be expected.

Chart Explanation

• Thin green line – entry price for buying;
• Thick green line – estimated Take Profit level or area to lock in profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling;
• Thick red line – estimated Take Profit level or area to lock in profits, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important Note for Beginners

Beginner Forex traders should make entry decisions very carefully. Before major fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you choose to trade during news releases, always place stop-loss orders to minimize potential losses. Without stop-losses, you can quickly lose your entire deposit—especially if you do not use proper money management and trade large volumes.

Remember, successful trading requires a clear trading plan, like the one outlined above. Spontaneous trading decisions based on current market conditions are inherently a losing strategy for intraday traders.