Analysis of Trades and Trading Advice for the British Pound

The price test of 1.3549 occurred when the MACD indicator had just begun to move down from the zero line, confirming that the entry point for a short position on the pound was appropriate and resulting in a 20-point decline in the pair.

The pressure on GBP/USD ahead of an important U.S. data release is understandable. Before such data are released, market activity traditionally declines, and traders tend to take profits. In the second half of the day, the focus will be on the U.S. Producer Price Index and its core version, excluding food and energy. This indicator reflects price pressures at the production stage, before they reach consumers, and is therefore considered a leading indicator of inflation. The previous PPI reading already indicated that price pressures were persisting. Following Waller's hawkish speech in Jackson Hole, where the Fed clearly emphasized the importance of containing inflation, such data releases are receiving particular attention.

Essentially, today's PPI is only an initial indicator ahead of tomorrow's consumer inflation report, which could influence the central bank's policy outlook in either direction. Data on existing home sales and initial jobless claims will also be released, but I consider them secondary and do not expect them to have a significant impact on the dollar. For the pound, which currently lacks its own major drivers, this means that it will remain dependent on external market factors.

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

Buy Signal

Scenario No. 1: Today, I plan to buy the pound when the entry point around 1.3546 is reached (the green line on the chart), with a target of 1.3600 (the thicker green line on the chart). Around 1.3600, I will close the long positions and open short positions in the opposite direction, targeting a 30–35-point move in the opposite direction from the level. The pound can be expected to rise today only after weak U.S. data. Important! Before buying, make sure that the MACD indicator is above the zero line and has only just begun to rise from it.

Scenario No. 2: I also plan to buy the pound today if the price tests 1.3513 twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal to the upside. A rise toward the opposite levels of 1.3546 and 1.3600 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after the price breaks below 1.3513 (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 1.3472, where I will close the short positions and immediately open long positions in the opposite direction, targeting a 20–25-point move in the opposite direction from the level. Strong downward pressure on the pound will return if U.S. economic data are strong. Important! Before selling, make sure that the MACD indicator is below the zero line and has only just begun to decline from it.

Scenario No. 2: I also plan to sell the pound today if the price tests 1.3546 twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal to the downside. A decline toward the opposite levels of 1.3513 and 1.3472 can be expected.

What the Chart Shows:

• Thin green line – indicates the entry price at which the trading instrument can be bought;
• Thick green line – indicates the estimated price at which Take Profit orders can be placed or profit can be taken manually, as further growth above this level is unlikely;
• Thin red line – indicates the entry price at which the trading instrument can be sold;
• Thick red line – indicates the estimated price at which Take Profit orders can be placed or profit can be taken manually, as further decline below this level is unlikely;
• MACD indicator – When entering the market, it is important to take the overbought and oversold areas into account.

Important. Beginner Forex traders should be very cautious when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid exposure to sharp exchange-rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is fundamentally an unsuccessful strategy for an intraday trader.