Trade Analysis and Recommendations for the British Pound

The price test at 1.3445 occurred when the MACD indicator had just started moving up from the zero line, confirming a valid entry point for buying the pound. However, a major upward movement did not follow.

Today's U.S. Consumer Price Index (CPI) and Core CPI data for June will determine the next direction for the GBP/USD pair. If the CPI exceeds expectations, it would likely lead to dollar strength, as the Federal Reserve would reinforce its rhetoric about keeping interest rates elevated to contain inflation — a scenario that typically attracts investors to the U.S. dollar. In turn, the British pound would come under pressure, and GBP/USD would move lower. A different outcome could unfold if inflation data falls short of forecasts. In that case, the Fed may adopt a more cautious stance, weakening the dollar and giving the pound an opportunity to recover, sending GBP/USD higher.

Today, FOMC members Michelle Bowman and Michael S. Barr are also scheduled to speak — their comments on the Fed's future outlook and rate policy are worth paying attention to.

As for the intraday strategy, I'll rely primarily on Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound at the 1.3460 entry point (green line on the chart), targeting a rise to 1.3494 (thicker green line on the chart). Around 1.3494, I will exit long positions and open shorts in the opposite direction, aiming for a 30–35 point pullback from the level. A pound rally today is possible if inflation data weakens.Important! Before buying, make sure the MACD indicator is above the zero line and just beginning to rise.

Scenario #2: I also plan to buy the pound if the price tests the 1.3440 level twice in a row, while the MACD is in the oversold zone. This would limit the pair's downward potential and trigger a reversal to the upside. A move toward the opposite levels of 1.3460 and 1.3494 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell the pound after the price breaks below the 1.3440 level (red line on the chart), which would lead to a quick drop. The key target for sellers will be 1.3407, where I plan to exit short positions and immediately open long positions in the opposite direction, targeting a 20–25 point rebound. Sellers will maintain pressure on the pair if U.S. price data jumps sharply.Important! Before selling, make sure the MACD indicator is below the zero line and just beginning to decline.

Scenario #2: I also plan to sell the pound if the 1.3460 level is tested twice in a row while the MACD is in the overbought zone. This would limit the pair's upward potential and lead to a reversal downward. A drop toward the opposite levels of 1.3440 and 1.3407 can be expected.

What's on the chart:

• Thin green line – Entry price for buying the trading instrument
• Thick green line – Projected Take Profit level or area to manually secure profits, as further growth above this level is unlikely
• Thin red line – Entry price for selling the trading instrument
• Thick red line – Projected Take Profit level or area to manually secure profits, as further decline below this level is unlikely
• MACD indicator – When entering trades, it is crucial to consider overbought and oversold zones

Important: Beginner Forex traders must be extremely cautious when deciding to enter the market. It's best to stay out of the market before the release of major fundamental reports to avoid sharp price swings. If you choose to trade during news releases, always place stop-loss orders to minimize losses. Trading without stop-losses can quickly wipe out your entire deposit, especially if you're not applying proper money management and are trading large volumes.

And remember: successful trading requires a clear trading plan — like the one presented above. Making impulsive trading decisions based on current market conditions is a losing strategy for intraday traders.