Trade Analysis and Tips for Trading the British Pound
The test of 1.3430 occurred when the MACD indicator had already moved well below the zero line, which limited the pair's downward potential. For this reason, I did not sell the pound.
U.K. GDP data matched economists' forecasts. Expectations had been built on assumptions of stronger-than-expected growth in the British economy, which fueled speculative buying. However, the actual figures disappointed optimistic investors. The pound sterling, already under pressure from a strengthening U.S. dollar, showed a restrained reaction and lacked the momentum needed to continue its upward movement.
During the U.S. trading session, several key releases should be noted. The U.S. Consumer Confidence Index, job openings data, and labor turnover statistics from the Census Bureau will be published. In addition, a speech by FOMC member Austan D. Goolsbee is scheduled. Special attention will be on the Census Bureau's report, as it may turn out to be the last significant dataset on the U.S. labor market this week — but only if the federal government shuts down tomorrow. If the government continues operating normally, investors can expect several more key releases, including Nonfarm Payrolls and inflation data. In the event of a shutdown, the Census Bureau's report will serve as the main reference point for gauging future market direction.
As for today's intraday strategy, I will focus mainly on scenarios No. 1 and No. 2.
Buy Signal
Scenario No. 1: I plan to buy the pound today at the entry point around 1.3445 (green line on the chart) with a target at 1.3480 (thicker green line on the chart). Around 1.3480, I will exit long positions and open short positions in the opposite direction, targeting a 30–35-point move. A strong rise in the pound is likely after weak U.S. data. Important! Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.
Scenario No. 2: I also plan to buy the pound today if there are two consecutive tests of 1.3419, while the MACD is in the oversold zone. This will limit the pair's downward potential and trigger a reversal upward. Growth can then be expected toward 1.3445 and 1.3480.
Sell Signal
Scenario No. 1: I plan to sell the pound today after a break below 1.3419 (red line on the chart), which would lead to a quick decline of the pair. The key target for sellers will be 1.3396, where I will exit shorts and immediately buy in the opposite direction, targeting a 20–25-point move. The pound could drop sharply in the second half of the day after strong U.S. data. Important! Before selling, make sure the MACD indicator is below the zero line and just starting to decline from it.
Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of 1.3445, while the MACD is in the overbought zone. This will limit the pair's upward potential and trigger a reversal downward. A decline toward 1.3419 and 1.3396 can then be expected.
What's on the Chart:
- Thin green line – entry price for buying the instrument.
- Thick green line – projected level for setting Take Profit or fixing profit, as further growth above this level is unlikely.
- Thin red line – entry price for selling the instrument.
- Thick red line – projected level for setting Take Profit or fixing profit, as further decline below this level is unlikely.
- MACD indicator – when entering the market, it is important to rely on overbought and oversold zones.
Important: Beginner Forex traders should be very cautious when deciding to enter the market. Before the release of key fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you choose to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade with large volumes.
And remember, successful trading requires a clear trading plan, like the one I presented above. Spontaneous decisions based only on the current market situation are, from the start, a losing strategy for an intraday trader.
