Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3497 price occurred when the MACD indicator was just starting to move upward from the zero level, confirming the validity of the entry point for buying the pound. As a result, the pair rose by only 10 points.

The August UK business activity report confirmed the continuation of the recovery, driven by the services sector. The sector accelerated to 52.5, its highest level in four months, while the composite index also rose to 52.5. At the same time, input-cost inflation turned upward after reaching a low in July, while services selling prices accelerated for the first time in four months. For the Bank of England, accelerating services prices are becoming a key signal, as they complicate efforts to bring inflation under control and support those favoring a tighter policy stance, while input costs in manufacturing, by contrast, slowed to their lowest level since February. For GBP/USD, this combination provides support from strong services activity and rising price pressures, but weakness in the labor market and the regulator's cautious approach are still preventing the bulls from establishing a sustained upward move.

In the second half of the day, the U.S. economic calendar will determine the pound's direction. The focus will be on the services business activity index, the composite PMI, weekly jobless claims, and the trade balance. Additional uncertainty will come from speeches by FOMC members Christopher Waller, Beth Hammack, and Austan Goolsbee, whose comments could further increase uncertainty and highlight divisions within the Federal Reserve. For GBP/USD, this means that weak data and dovish signals will support the British currency, while strong statistics and hawkish comments will strengthen the dollar.

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

Buy Signal

Scenario No. 1: Today, I plan to buy the pound when the entry point is reached around 1.3501 (the green line on the chart), with a target of 1.3523 (the thicker green line on the chart). Around 1.3523, I will exit the long position and open a short position in the opposite direction, targeting a move of 30–35 points 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 level and is just starting to rise from it.

Scenario No. 2: I also plan to buy the pound today if the price tests 1.3485 twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal of the market to the upside. A rise toward the opposite levels of 1.3501 and 1.3523 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after the 1.3485 level is updated (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 1.3459, where I will exit the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Strong downward pressure on the pound will return if the data are strong. Important! Before selling, make sure that the MACD indicator is below the zero level and is just starting to decline from it.

Scenario No. 2: I also plan to sell the pound today if the price tests 1.3501 twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal of the market to the downside. A decline toward the opposite levels of 1.3485 and 1.3459 can be expected.

What Is on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the projected 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 – the entry price at which the trading instrument can be sold;
• Thick red line – the projected 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 zones into account.

Important. Beginner Forex traders should be very cautious when making market entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in 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 trading decisions spontaneously based on the current market situation is an inherently losing strategy for an intraday trader.