Trade Review and Tips for Trading the British Pound

The test of the 1.3531 level occurred when the MACD indicator had just begun moving upward from the zero line, confirming a valid entry point for buying the pound. As a result, the pair rose by 15 points.

In the absence of UK fundamental data, the pound recovered slightly. This was supported by a lack of negative news from the United Kingdom and low volatility in global markets. However, despite the easing pressure, the pound lacked sufficient grounds for a significant upward move.

Important macroeconomic data releases are ahead, which could have a strong impact on the U.S. dollar. Particular attention will be paid to the ISM Services PMI. This indicator is traditionally considered one of the key barometers of the U.S. economy, reflecting sentiment in one of the largest components of GDP. Its reading is expected to help assess the pace of recovery and the current resilience of consumer demand.

Another important set of data will come from the U.S. Bureau of Labor Statistics, which will release figures on job openings and labor turnover. These indicators provide insight into labor market conditions, including labor shortages and overall job-seeker activity. They are especially relevant amid ongoing discussions about potential interest rate adjustments. In addition, the market will closely monitor new home sales data, which is a sensitive indicator of the construction sector and reflects demand in the housing market.

As for the intraday strategy, I will rely primarily on the execution of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1:

I plan to buy the pound today upon reaching the entry point around 1.3555 (green line on the chart), with a target of 1.3586 (thicker green line on the chart). Around 1.3586, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move). A rise in the pound today is only likely if U.S. data comes in weak.

Important: Before buying, make sure the MACD indicator is above the zero line and just beginning to rise from it.

Scenario No. 2:

I also plan to buy the pound if there are two consecutive tests of the 1.3537 level while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger a reversal to the upside. In this case, growth toward 1.3555 and 1.3586 can be expected.

Sell Signal

Scenario No. 1:

I plan to sell the pound after a breakout below the 1.3537 level (red line on the chart), which would lead to a rapid decline. The key target for sellers will be 1.3505, where I plan to exit short positions and open long positions in the opposite direction (expecting a 20–25 point move). Pressure on the pound will return today if U.S. data comes in strong.

Important: Before selling, make sure the MACD indicator is below the zero line and just beginning to decline from it.

Scenario No. 2:

I also plan to sell the pound if there are two consecutive tests of the 1.3555 level while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a reversal to the downside. A decline toward 1.3537 and 1.3505 can then be expected.

Chart Notes

• Thin green line: entry price for buying the instrument
• Thick green line: suggested Take Profit level or area to lock in profits, as further growth above this level is unlikely
• Thin red line: entry price for selling the instrument
• Thick red line: suggested Take Profit level or area to lock in profits, as further decline below this level is unlikely
• MACD indicator: when entering the market, pay attention to overbought and oversold zones

Important

Beginner Forex traders should make entry decisions with extreme caution. It is best to stay out of the market during major fundamental releases to avoid sharp price swings. If you choose to trade during news events, always use stop-loss orders to minimize potential losses.

Without stop-loss orders, you can quickly lose your entire deposit—especially if you do not use proper money management and trade large volumes.

Remember, successful trading requires a clear trading plan, like the one outlined above. Making spontaneous trading decisions based solely on current market conditions is a losing strategy for intraday traders.