Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3500 price coincided with the MACD indicator moving significantly below the zero mark, limiting the pair's downward potential. The second test at 1.3500 triggered Scenario #2 for buying the pound, resulting in a gain of more than 25 pips for the pair.

If the March data on consumer inflation caused only mild disappointment, the Producer Price Index (PPI) published yesterday was a real shocker. In April, this indicator increased by 1.4% and 6.0% year-on-year. These data confirm underlying structural trends that will compel the Federal Reserve to be more active than it currently is.

Today, the first half of the day will be marked by the release of significant macroeconomic reports from the United Kingdom, which could have a noticeable impact on the British pound's exchange rate. Market professionals and investors will focus closely on GDP growth data, which has recently been underwhelming. Additionally, data on industrial production are expected to be published, with little good to hope for in this area. Negative results here may indicate difficulties in supply chains, reduced consumer demand, or other factors negatively affecting manufacturing activity.

If the published data turn out to be worse than forecasts, it will undoubtedly increase negative pressure on the British pound.

As for the intraday strategy, I will rely more on implementing scenarios No. 1 and No. 2.

Buy Scenarios

Scenario #1: I plan to buy the pound today upon reaching an entry price around 1.3533 (green line on the chart), targeting a rise to 1.3570 (thicker green line on the chart). At point 1.3570, I plan to exit the market and also sell the pound in the opposite direction, expecting a movement of 30-35 pips from the entry point. A strong rise in the pound can only be expected with 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 1.3508 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. One can expect growth toward the opposite levels of 1.3533 and 1.3570.

Sell Scenarios

Scenario #1: I plan to sell the pound after the 1.3508 level is updated (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the level of 1.3458, where I plan to exit the short positions and immediately buy in the opposite direction, expecting a movement of 20-25 pips in the opposite direction from the level. Pressure on the pound could return if the GDP data is poor. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning its decline from it.

Scenario #2: I also plan to sell the pound today if there are two consecutive tests of 1.3533 when the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a downward market reversal. One can expect a decline toward the opposite levels of 1.3508 and 1.3458.

What is on the Chart:

• The thin green line – entry price at which the trading instrument can be bought;
• The thick green line – approximate price where take profit can be set or to realize profit, as further growth above this level is unlikely;
• The thin red line – entry price at which the trading instrument can be sold;
• The thick red line – approximate price where take profit can be set or to realize profit, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner traders in the Forex market need to make entry decisions very cautiously. It is best to stay out of the market before important fundamental reports to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making impulsive trading decisions based on the current market situation is fundamentally a losing strategy for an intraday trader.