Trade Analysis and Trading Tips for the British Pound

The test of the 1.3700 price level occurred at a moment when the MACD indicator had moved significantly upward from the zero line, which limited the pair's upward potential. For this reason, I did not buy the pound.

The absence of U.K. economic data helped the pound rise, but the move was short-lived. However, such a development was quite expected, as a bearish tone is clearly visible in the market right now. The lack of clarity regarding the British economy only fueled speculative sentiment.

Next, traders will closely monitor the JOLTS report to assess the condition of the U.S. labor market and its impact on inflation. A high level of job openings may indicate that companies are struggling to find workers, which contributes to wage growth and, consequently, inflation. On the other hand, a decline in the number of job openings may signal a weakening labor market and easing inflationary pressure. The RCM/TIPP Economic Optimism Index reflects consumer sentiment regarding the current economic situation and their expectations for the future. An increase in this index would support dollar gains against the pound.

Attention should also be paid to speeches by FOMC members Thomas Barkin and Michelle Bowman, which may provide investors with additional insight into the outlook for Federal Reserve monetary policy.

As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy the pound when the entry point is reached around 1.3691 (thin green line on the chart), with a growth target at 1.3727 (the thicker green line on the chart). Around 1.3727, I will exit long positions and open short positions in the opposite direction (aiming for a 30–35-point move in the opposite direction from that level). Pound growth today can be expected after weak U.S. data.Important! Before buying, make sure that 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 in the event of two consecutive tests of the 1.3660 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 1.3691 and 1.3727 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after the 1.3660 level is broken (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be the 1.3628 level, where I plan to exit short positions and also immediately open long positions in the opposite direction (aiming for a 20–25-point move in the opposite direction from that level). Pressure on the pound will return today in the case of strong data.Important! Before selling, make sure that 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 the 1.3691 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.3660 and 1.3628 can be expected.

What's on the Chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price where Take Profit orders can be placed or profits can be manually locked in, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price where Take Profit orders can be placed or profits can be manually locked in, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to pay attention to overbought and oversold zones.

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

And remember that successful trading requires a clear trading plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.