Trade review and trading advice on the British pound

The price test at 1.3585 occurred at a moment when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. For this reason, I did not buy the pound. The second test triggered scenario No. 2 for selling, continuing yesterday's bearish market, but no major decline followed.

Next, very important figures are expected that will determine not only Federal Reserve policy but also reflect the resilience of the economy. Economists generally agree that the U.S. labor market in April will remain stable. The forecast for Nonfarm Payrolls is around 67,000 jobs. The unemployment rate, according to consensus expectations, should remain steady at 4.3%. These data will be a key indicator for the Federal Reserve in assessing economic stability and adjusting monetary policy further. Strong figures could delay expectations for the first rate cuts.

Equally important for the Fed will be wage growth. The rate of increase in average hourly earnings will be closely monitored for signs of rising inflationary pressure. Sustained income growth, on one hand, supports consumer spending, but on the other, may complicate the fight against inflation, forcing the regulator to maintain a restrictive stance, which is supportive for the dollar.

At the same time, the University of Michigan Consumer Sentiment Index for May will be released. Any upside surprise in inflation expectations will be viewed very negatively and could trigger a rise in the U.S. dollar against risk assets, including the pound.

Regarding the intraday strategy, I will mainly rely on scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today I plan to buy the pound if the entry point at around 1.3625 (green line on the chart) is reached, targeting a rise to 1.3661 (thicker green line). Around 1.3661, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point pullback). Pound growth today is only expected after weak U.S. data. Important! Before buying, ensure the MACD is above the zero line and just beginning to rise from it.

Scenario No. 2: I will also consider buying the pound if there are two consecutive tests of the 1.3607 level while the MACD is in oversold territory. This would limit downward potential and trigger a reversal upward. In this case, a move toward 1.3625 and 1.3661 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound after a break below 1.3607 (red line on the chart), which should lead to a quick decline. The key target for sellers is 1.3573, where I will exit shorts and open buys in the opposite direction (expecting a 20–25 point rebound). Selling pressure is expected to return today with strong U.S. data. Important! Before selling, ensure the MACD is below the zero line and just starting to decline.

Scenario No. 2: I will also consider selling the pound if there are two consecutive tests of the 1.3625 level while the MACD is in overbought territory. This would limit upward potential and lead to a downward reversal. A decline toward 1.3607 and 1.3573 can be expected.

What is on the chart:

• Thin green line – entry price for buying the instrument
• Thick green line – expected Take Profit level or area for manual profit-taking, as further growth above this level is unlikely
• Thin red line – entry price for selling the instrument
• Thick red line – expected Take Profit level or area for manual profit-taking, as further decline below this level is unlikely
• MACD indicator – when entering trades, it is important to monitor overbought and oversold zones

Important note: Beginner Forex traders must be very cautious when making market entry decisions. Before important fundamental releases, it is best to stay out of the market to avoid sharp price volatility. If you choose to trade during news releases, always place stop-loss orders to minimize losses. Without stop-losses, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember: successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are, from the outset, a losing strategy for intraday traders.