Trade Analysis and Tips for Trading the British Pound

The test of 1.3287 occurred when the MACD indicator had already moved significantly below the zero line, limiting the pair's downward potential. For this reason, no short position was opened on the pound.

Today, the pound faces the Fed's decision amid uncertainty on two fronts. On the one hand, Kevin Warsh will speak this evening. On the other, John Healey is presenting the annual budget and the Treasury's autumn forecast today, and market sentiment will depend on how convincing the plan proves to be. US inflation for September exceeded expectations, with producer prices rising by 1.3% month on month and 6.3% year on year. Fuel prices accounted for the largest share of the increase, leaving the Fed with limited room for maneuver.

Meanwhile, the UK budget has heightened market stress and caution. The document has not yet been published, forcing traders to price in uncertainty. If Warsh maintains a hawkish tone, the dollar will receive additional support, making it difficult for GBP/USD to hold its current levels even if the UK budget is broadly reassuring. A dovish stance from Warsh would create a more favorable outlook for the pound. If he signals a willingness to wait for further data, as Jefferson and Williams have done, the dollar will weaken, while the pound could recover some of yesterday's losses, supported by expectations of a Bank of England rate hike on November 5.

Regarding the intraday strategy, greater emphasis will be placed on implementing Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: The pound can be bought today when the price reaches the entry level around 1.3292 (the green line on the chart), with a target at 1.3330 (the thicker green line on the chart). Around 1.3330, the long position can be closed and a short position opened in the opposite direction, targeting a move of 30–35 points from that level. The pound could rise today if US economic data are weaker than expected. Important! Before buying, make sure that the MACD indicator is above the zero line and has just started rising from it.

Scenario No. 2: The pound can also be bought today if the price tests 1.3265 twice consecutively while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger an upward market reversal. A rise toward the opposite levels of 1.3292 and 1.3330 can then be expected.

Sell Signal

Scenario No. 1: The pound can be sold today after the price breaks below 1.3265 (the red line on the chart), which could trigger a rapid decline in the pair. The key target for sellers is 1.3227, where the short position can be closed and a long position opened immediately in the opposite direction, targeting a rebound of 20–25 points from that level. Strong selling pressure on the pound could return if US economic data are stronger than expected. Important! Before selling, make sure that the MACD indicator is below the zero line and has just started falling from it.

Scenario No. 2: The pound can also be sold today if the price tests 1.3292 twice consecutively while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a downward market reversal. A decline toward the levels of 1.3265 and 1.3227 can then be expected.

What the Chart Shows:

• Thin green line — the entry price at which the trading instrument can be bought.
• Thick green line — the projected price level for placing a Take Profit order or closing the position manually, as further gains above this level are considered unlikely.
• Thin red line — the entry price at which the trading instrument can be sold.
• Thick red line — the projected price level for placing a Take Profit order or closing the position manually, as further declines below this level are considered unlikely.
• MACD indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner Forex traders should exercise considerable caution when deciding whether to enter the market. Before the release of major fundamental reports, it is generally best to remain out of the market to avoid exposure to sharp exchange-rate fluctuations. If trading during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, the entire trading account can be depleted very quickly, especially when risk management rules are not followed and excessively large position sizes are used.

Remember that successful trading requires a clear trading plan, such as the example provided above. Making spontaneous trading decisions based on current market conditions is a fundamentally losing strategy for an intraday trader.