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The test of the price level at 1.3453 coincided with the moment when the MACD indicator was just beginning to move down from the zero mark, confirming the correct entry point for selling the pound. As a result, the pair decreased to the target level of 1.3412.
The US dollar rose sharply against the British pound, benefiting from a combination of favorable economic and geopolitical factors. The main driver of the dollar's strengthening was the release of the ISM Manufacturing Index in the US, which exceeded economists' expectations, rising to 54 points. This figure, reflecting the state of the manufacturing sector in the world's largest economy, is a key indicator of its health and business activity. A value above 50 typically indicates production expansion, which the market views as a positive signal, thereby enhancing the attractiveness of American assets.
Additional pressure on the pair came from escalating disagreements between the United States and Iran. The intensification of geopolitical tensions in a key region of the world inevitably heightens global uncertainty.
Today promises to be no less eventful for financial markets, especially in the UK. In the first half of the day, key economic indicators will be released, allowing an assessment of consumer demand and the availability of credit resources. Data on approved mortgage applications serve as a barometer of public confidence in their own capabilities and the prospects of the housing market. An increase in this indicator may indicate some revival in the construction sector and, consequently, a positive impact on related industries. However, due to high interest rates, good figures are unlikely.
Nevertheless, despite the importance of all the listed data, the highlight of the day will undoubtedly be the speech by Bank of England Governor Andrew Bailey. Markets will carefully analyze each of his words for signals about the central bank's future actions.
Regarding the intraday strategy, I will focus more on implementing scenarios #1 and #2.
Scenario #1: I plan to buy the pound today when the price reaches around 1.3481 (green line on the chart), with a target price of 1.3524 (thicker green line on the chart). At level 1.3524, I plan to exit the long positions and immediately open short positions in the opposite direction (expecting a movement of 30-35 pips back from the level). One can only expect a strong rise in the pound today after 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 in the event of two consecutive tests of the price 1.3458 when the MACD indicator is in the oversold zone. This will limit the downward potential of the pair and lead to a market reversal upwards. Growth can be expected towards the opposing levels of 1.3481 and 1.3524.
Scenario #1: I plan to sell the pound today after it breaks below the level of 1.3458 (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 1.3412 level, where I intend to exit the shorts and immediately buy back in the opposite direction (expecting a 20-25-pip move back from the level). Pressure on the pound will return in case of weak data. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline from it.
Scenario #2: I also plan to sell the pound today if the price tests 1.3481 twice in a row, when the MACD indicator is in the overbought zone. This will limit the upward potential of the pair and lead to a market reversal downwards. A decrease can be expected towards the opposing levels of 1.3458 and 1.3412.
Thin green line – entry price for buying the trading instrument;
Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;
Thin red line – entry price for selling the trading instrument;
Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;
MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.
Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.
And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.
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