Trade review and trading tips for the British pound

The price test at 1.3355 occurred as the MACD indicator began moving down from the zero line, confirming a correct entry point to sell the pound. As a result, the pair fell toward the target area near 1.3336.

Downside pressure on sterling resumed after three Federal Reserve officials made nearly simultaneous comments during the day. Richmond Fed president Tom Barkin warned that inflationary shocks may take considerably longer to fade and did not rule out the risk that elevated inflation could persist. Boston Fed president Susan Collins went further, explicitly saying she factors in another rate increase before year-end. New York Fed president John Williams supported the direction while focusing on technical market infrastructure issues. Although none of the three has a Fed vote this year, their combined rhetoric materially strengthened expectations of further tightening — a headwind for GBP.

With no significant UK-specific data to support sterling, the outcome was a renewed weakening and fresh weekly lows.

Today, however, buyers have at least one hope for a corrective bounce: the September PMI block for the UK (manufacturing, services and composite). August already painted a mixed picture — manufacturing slipped to a five-month low at 51.5 while services rose to 52.5 and pulled the composite up to 52.0. If today's prints continue the cooling trend, especially in manufacturing, that would add downward pressure on GBP/USD. Weak PMIs are typically read as a sign of slowing activity, which reduces the case for Bank of England tightening — leaving sterling with even less independent support versus the dollar.

For intraday strategy, I will rely mainly on Scenarios No. 1 and No. 2.

Buy scenarios

Scenario No. 1: I plan to buy the pound today around 1.3321 (green line on the chart), targeting a move to 1.3340 (thicker green line). Around 1.3340, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip swing from that level). Expect sterling strength today only following strong UK data. Important: before buying, ensure the MACD is above zero and only beginning to rise.

Scenario No. 2: I also plan to buy the pound today in case of two consecutive tests of 1.3305 while the MACD is in oversold territory. That would limit the pair's downside and lead to a reversal upward. Expect moves to 1.3321 and 1.3340.

Sell scenarios

Scenario No. 1: I plan to sell the pound after a break below 1.3305 (red line on the chart), which would lead to a quick decline. Sellers' key target will be 1.3279, where I plan to exit shorts and immediately open longs in the opposite direction (expecting a 20–25 pip reversal). Bad news will restore selling pressure. Important: before selling, ensure the MACD is below zero and only beginning to fall.

Scenario No. 2: I also plan to sell the pound today in case of two consecutive tests of 1.3321 while the MACD is in overbought territory. That would limit upside and trigger a reversal down. Expect a drop to 1.3305 and 1.3279.

What to Look for on the Chart:

• Thin Green Line – Entry price at which you can buy the trading instrument;
• Thick Green Line – Estimated price where you can set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin Red Line – Entry price at which you can sell the trading instrument;
• Thick Red Line – Estimated price where you can set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it's important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to stay out of the market ahead of significant fundamental reports to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not employ money management practices and trade large volumes.

Also, remember that successful trading requires a clear trading plan, similar to the one provided above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.