Analysis of Trades and Trading Tips for the British Pound

The test of the 1.2312 level occurred when the MACD indicator had already moved significantly below the zero mark, clearly limiting the pair's downward potential. For this reason, I did not sell the pound. Later in the day, a test of the 1.2348 level also coincided with the MACD being far from the zero mark, which limited the pair's upward potential.

The increase in public sector borrowing in the UK can be both a positive and a negative factor. On the one hand, it creates opportunities for investments in infrastructure and social programs, potentially boosting economic growth. On the other hand, increased debt may raise concerns among creditors and investors, potentially leading to higher interest rates and weaker financial metrics in the long term. Despite these concerns, the pound reacted to the data with growth.

Later today, the US Leading Indicators Index for December 2024 is expected. Amid global economic changes and uncertainty, this index serves as a barometer for future economic trends. It is anticipated to show moderate growth for December, indicating potential recovery in economic activity in the coming months. However, experts remain cautious due to persistent inflation and high interest rates, which could pressure consumers and businesses, affecting economic growth prospects.

For intraday trading strategy, I will focus on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound at an entry point near 1.2398 (green line on the chart), targeting a rise to 1.2473 (thicker green line on the chart). Around 1.2473, I plan to exit purchases and open sales in the opposite direction, aiming for a 30–35 point correction from the level. Further growth of the pound today is expected as part of the ongoing upward trend.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 if the price tests 1.2341 twice, with the MACD indicator in the oversold zone. This will limit the pair's downside potential and lead to a market reversal upward. Growth to 1.2398 and 1.2473 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound after it updates the 1.2341 level (red line on the chart), leading to a quick drop in the pair. Sellers' main target will be 1.2268, where I will exit sales and immediately open purchases in the opposite direction, aiming for a 20–25 point correction from the level. Sellers could act at any moment.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 if the price tests 1.2398 twice, with the MACD indicator in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. A decline to 1.2341 and 1.2268 can be expected.

Chart Details

• Thin Green Line: Entry price for buying the instrument.
• Thick Green Line: Estimated price to set Take Profit or manually lock in profits, as further growth above this level is unlikely.
• Thin Red Line: Entry price for selling the instrument.
• Thick Red Line: Estimated price to set Take Profit or manually lock in profits, as further decline below this level is unlikely.
• MACD Indicator: When entering the market, consider overbought and oversold zones.

Important Notes

Beginner Forex traders must approach market entry decisions cautiously. Before major fundamental reports are released, it is advisable to stay out of the market to avoid sudden price swings. If you decide to trade during news releases, always set stop-loss orders to minimize losses. Without stop-loss orders, you could quickly lose your entire deposit, especially if you do not practice proper money management and trade large volumes.

Remember, successful trading requires a clear trading plan, like the one outlined above. Making spontaneous trading decisions based on the current market situation is a losing strategy for intraday traders.