Trade Analysis and Recommendations for the British Pound

The test of the 1.3654 level occurred when the MACD indicator had already moved well below the zero mark, which limited the pair's downward potential.

The British pound failed to receive support after the release of the UK construction PMI data. While the report came in better than expected, indicating some revival in the construction sector, it was not enough to drive meaningful demand for the pound given the broader economic context. Thin market liquidity on this holiday is a key factor. Markets are thinner than usual, making them more sensitive to sharp and unpredictable moves. In the short term, GBP will likely continue to trade within a narrow range, especially as all U.S. markets are closed for Independence Day. Despite the anticipated quiet trading, market participants should remain alert. Low liquidity could still lead to sharp and sudden price swings triggered by large individual orders or unexpected headlines unrelated to the U.S. economy.

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

Buy Signal

Scenario #1:I plan to buy GBP today at the entry point around 1.3668 (green line on the chart) with a target of rising to 1.3698 (thicker green line on the chart). Around 1.3698, I intend to exit the buy trade and open a sell position in the opposite direction, aiming for a 30–35 point move from that level. A strong rally in the pound is unlikely today.Important: Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2:I also plan to buy GBP if the price tests 1.3636 twice in a row while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and lead to a market reversal upward. A rise toward the opposite levels of 1.3668 and 1.3698 can be expected.

Sell Signal

Scenario #1:I plan to sell GBP today after a breakdown below 1.3636 (red line on the chart), which could quickly push the pair lower. The key target for sellers will be 1.3602, where I plan to exit the sell trade and open a buy position in the opposite direction, aiming for a 20–25 point rebound from that level. Sellers are unlikely to show strong momentum today.Important: Before selling, make sure the MACD indicator is below the zero line and just starting to fall from it.

Scenario #2:I also plan to sell GBP today if the price tests 1.3668 twice in a row while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a downward reversal. A drop toward 1.3636 and 1.3602 can be expected.

Chart Legend:

• Thin green line – entry price for buying the instrument
• Thick green line – suggested level for Take Profit or manual profit-taking, as further growth above this level is unlikely
• Thin red line – entry price for selling the instrument
• Thick red line – suggested level for Take Profit or manual profit-taking, as further decline below this level is unlikely
• MACD Indicator – it's important to consider overbought and oversold zones when entering the market

Important:Beginner Forex traders should be very cautious when making market entry decisions. It's best to stay out of the market ahead of major fundamental reports to avoid sharp price fluctuations. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you could quickly lose your entire deposit—especially if you're not using proper money management and trading large volumes.

And remember: successful trading requires a clear trading plan like the one provided above. Making spontaneous decisions based on current market sentiment is a losing strategy for intraday traders.