The test of the 1.2637 level occurred when the MACD indicator had moved significantly above the zero mark, which limited the pair's upward potential. For this reason, I did not buy the pound. Today, there is once again no significant economic data from the UK. However, parliamentary hearings on the Bank of England's monetary policy report will take place, during which Governor Andrew Bailey will attempt to explain why he has not actively continued to lower interest rates despite the UK economy showing signs of contraction. A dovish stance could revive demand for the pound, leading to a more significant correction in the pair. Conversely, a cautious approach due to inflationary risks could cause the pound to decline. I will focus on implementing Scenarios #1 and #2 for the intraday strategy.
Scenario #1: I plan to buy the pound today at the 1.2685 level (green line on the chart) with a target of 1.2709 (thicker green line on the chart). At the 1.2709 level, I intend to exit the market and open sales in the opposite direction (anticipating a pullback of 30–35 pips from the entry point). Expecting a rise in the pound today is only realistic as part of a correction. Important! Before buying, ensure the MACD indicator is above the zero mark and starting to rise.
Scenario #2: I also plan to buy the pound if there are two consecutive tests of the 1.2666 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward reversal. A rise toward the 1.2685 and 1.2709 levels can be expected.
Sell ScenariosScenario #1: I plan to sell the pound today after breaking below the 1.2666 level (red line on the chart), which could lead to a rapid decline in the pair. The key target for sellers will be 1.2639, where I plan to exit sales and immediately open purchases in the opposite direction (anticipating a rebound of 20–25 pips from the level). Selling the pound is possible, but it is better done at higher levels. Important! Before selling, ensure the MACD indicator is below the zero mark and starting to decline.
Scenario #2: I also plan to sell the pound if there are two consecutive tests of the 1.2685 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the 1.2666 and 1.2639 levels can be expected.