The price test at 1.3341 came as the MACD indicator began moving down from the zero line, confirming a valid entry point to sell the pound. As a result, the pair fell only about 10 pips.
Among currencies that ceded ground to the dollar yesterday, the pound looked the most resilient. In the morning, like the others, it came under pressure, but the day ended with a decent rebound. The main driver was the CBI October survey, which showed the retail-sales balance at -10 versus -55 in September and a -47 forecast. That improvement significantly beat expectations and showed retailers were much more optimistic about sales than a month earlier. Nonetheless, the main events are still ahead. The market views the Federal Reserve meeting as a pause, but any hawkish wording from the central bank could return the dollar's initiative.
Today's report that in-store retail prices rose more than expected did not move the pound. The BRC retail-price index for October came in at 2.1% versus economists' 1.6% forecast and 1.4% in September, yet the FX market ignored the print. The reason is simple: the Bank of England rate hike on November 5 is already priced in, and one more argument in its favor doesn't change the picture. Earlier, Megan Greene urged a rate hike, and Friday's PMIs, with a composite of 53.1, confirmed economic resilience. No more UK releases are scheduled today, so further GBP/USD movement depends on the dollar.
For the intraday strategy, I will rely more on Scenarios No. 1 and No. 2.
Scenario No. 1: I plan to buy the pound today when it reaches an entry point around 1.3335 (the green line on the chart), targeting a move up to 1.3360 (the thicker green line on the chart). Around 1.3360, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35-pip move away from that level). You can count on the pound to rise today as part of a small correction. Important! Before buying, make sure the MACD indicator is above the zero line and is just beginning to rise from it.
Scenario No. 2: I also plan to buy the pound today if it tests 1.3318 twice in a row while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward reversal. One can expect a rise to the opposite levels of 1.3335 and 1.3360.
Scenarios for SellingScenario No. 1: I plan to sell the pound today after 1.3318 is refreshed (red line on the chart), which will lead to a rapid decline of the pair. The sellers' key target will be 1.3296, where I intend to exit shorts and immediately open longs in the opposite direction (expecting a 20–25-pip move in the opposite direction from that level). Bad news will return pressure on the pound. Important! Before selling, make sure the MACD indicator is below the zero line and is just beginning to decline from it.
Scenario No. 2: I also plan to sell the pound today in the event of two consecutive tests of 1.3335 when the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward reversal. One can expect a decline to the opposite levels of 1.3318 and 1.3296.
Thin green line — entry price where you can buy the instrument.
Thick green line — approximate price where you can place Take Profit or manually lock in profits, because further upside above this level is unlikely.
Thin red line — entry price where you can sell the instrument.
Thick red line — approximate price where you can place Take Profit or manually lock in profits, because further downside below this level is unlikely.
MACD indicator. When entering the market, it's important to consider overbought and oversold zones.
Important. Novice Forex traders must be very cautious when deciding to enter the market. It is best to stay out before major fundamental reports to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.
Remember: successful trading requires a clear trading plan, like the example above. Spontaneous trade decisions based solely on the immediate market situation are, by definition, a losing strategy for an intraday trader.