Trade Analysis and Advice for the British Pound

None of the identified levels were tested in the first half of the day. The lack of economic data from the UK and low market volatility played a key role in this.This, in turn, led to stagnation in GBP/USD trading, as new data for evaluating the British economy's outlook was absent. It remains crucial to exercise caution and avoid large GBP positions until further clarity emerges. Volatility could spike suddenly once new information enters the market, and predicting the direction of such a move is nearly impossible at this stage.

Later today, the U.S. observes Presidents' Day, a public holiday, so I would not expect significant market volatility. The focus will be on speeches by FOMC members Patrick T. Harker and Michelle Bowman. Investors are likely to take a wait-and-see approach, evaluating recent economic data and awaiting clearer signals from the Federal Reserve on future interest rate trajectories.Markets will be paying close attention to any hints regarding a possible shift toward a more dovish monetary policy or, conversely, the Fed's willingness to maintain a wait-and-see stance, given slowing economic growth. Overall, a quiet trading day with a narrow price range is expected—unless unexpected geopolitical events or a shift in investor sentiment occur.

For intraday trading strategy, I will focus mainly on Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: Buy GBP/USD at 1.2615 (green line on the chart) with a target of 1.2646. At 1.2646, I plan to exit long positions and enter short positions, expecting a 30-35 point pullback. GBP/USD may rise today only if FOMC members deliver dovish comments.Important: Before buying, ensure that the MACD indicator is above the zero line and starting to rise.

Scenario #2: I also plan to buy GBP/USD if the price tests 1.2585 twice, while the MACD indicator is in the oversold zone. This setup will limit the downward potential and trigger a bullish reversal. Expected targets: 1.2615 and 1.2646.

Sell Signal

Scenario #1: Sell GBP/USD after a breakdown of 1.2585 (red line on the chart), which should trigger a rapid price decline. The main target for sellers will be 1.2549, where I will exit short positions and enter long positions, expecting a 20-25 point rebound. GBP/USD sellers will likely become active if FOMC members maintain a hawkish stance.Important: Before selling, ensure that the MACD indicator is below the zero line and starting to decline.

Scenario #2: I also plan to sell GBP/USD if the price tests 1.2615 twice, while the MACD indicator is in the overbought zone. This will limit the upward potential and likely trigger a bearish reversal. Expected targets: 1.2585 and 1.2549.

Chart Explanation

• Thin green line: Entry price for buying.
• Thick green line: Approximate price for setting Take Profit or manually securing profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling.
• Thick red line: Approximate price for setting Take Profit or manually securing profits, as further decline below this level is unlikely.
• MACD Indicator: When entering the market, consider overbought and oversold conditions.

Important Notes for Beginner Traders

• Be very cautious when making entry decisions. Before major fundamental reports, it is best to stay out of the market to avoid unexpected volatility.
• If trading during high-impact news, always use stop-loss orders to minimize losses. Without them, your account could be wiped out very quickly, especially when trading large volumes.
• Successful trading requires a clear trading plan, like the one outlined above. Spontaneous trading decisions based on short-term market conditions are a losing strategy for intraday traders.