Analysis of Trades and Trading Tips for the British Pound
The price test at 1.3535 in the second half of the day occurred just as the MACD indicator was beginning to move downward from the zero line. This confirmed the correct entry point for selling the pound, resulting in a decline of more than 30 pips.
U.S. economic indicators published on Friday sparked a wave of optimism across financial markets. Non-farm employment showed confident growth, surpassing economists' forecasts and reaching 139,000 new jobs, while market expectations hovered around 127,000. This factor immediately impacted currency rates, prompting the U.S. dollar to strengthen against major world currencies, particularly the British pound. The unemployment rate, remaining stable at 4.2%, also added to the positive sentiment. A low unemployment rate indicates the U.S. economy's healthy state and stable labor demand. This provides a favorable backdrop for continued economic growth and strengthens the dollar's position. The British pound's reaction to this news was expected — a decline against the U.S. dollar. Investors, assessing U.S. economic prospects as more favorable, redirected their capital, increasing demand for the dollar and decreasing demand for the pound sterling.
Today, there is no economic data from the UK, so it is possible that after Friday's pullback, pound buyers may continue to act within the bullish market framework, betting on further growth in the GBP/USD pair. The absence of fresh economic data leaves room for speculation and allows traders to rely on already-established trends. However, existing risks should not be forgotten. Global economic uncertainty due to U.S. tariffs could exert pressure on the British currency at any moment.
For intraday strategy, I will focus primarily on Scenarios #1 and #2.
Buy Scenario
Scenario #1: Today, I plan to buy the pound if the entry point 1.3567 (green line on the chart) is reached, with a target to rise to the 1.3607 level (thicker green line on the chart). Around 1.3607, I plan to exit long positions and immediately open short positions (targeting a 30-35 pip move in the opposite direction). Strong growth of the pound is unlikely today. Important! Before buying, ensure the MACD indicator is above the zero line and beginning to rise.
Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the 1.3545 level when the MACD indicator is in the oversold area. This will limit the downside potential of the pair and lead to an upward market reversal. Growth can be expected toward the opposite levels of 1.3567 and 1.3607.
Sell Scenario
Scenario #1: I plan to sell the pound after breaking below 1.3545 (red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be 1.3501, where I plan to exit short positions and immediately open long positions (targeting a 20-25 pip move in the opposite direction). Selling the pound is advisable after failing to break out above the daily high. Important! Before selling, ensure the MACD indicator is below the zero line and beginning to decline from it.
Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the 1.3567 level when the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward market reversal. A decline can be expected toward the opposite levels of 1.3545 and 1.3501.
What's on the Chart:
- The thin green line represents the entry price where the trading instrument can be bought.
- The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
- The thin red line represents the entry price where the trading instrument can be sold.
- The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
- The MACD indicator should be used to assess overbought and oversold zones when entering the market.
Important Notes:
- Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
- Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.
