Review of Trades and Trading Tips for the British Pound
The test of the 1.3420 level occurred when the MACD indicator was just beginning to move lower from the zero line, confirming a valid entry point for selling the pound. As a result, the pair declined by only 10 points.
The UK construction sector recorded a decline in business activity in May 2026, putting pressure on the British pound. The decisive factor was negative business sentiment driven by economic uncertainty. Companies reported weaker new orders and a more cautious approach to project investment. According to official S&P Global data, construction activity declined for the first time in 13 months, contrasting with the more resilient performance of the manufacturing and services sectors. This may signal a slowdown in the recovery of the construction industry following previous periods of uncertainty.
In the second half of the day, the market will focus on U.S. initial jobless claims data and a speech by FOMC member Mary Daly. Although these two events may appear unrelated at first glance, they could influence the future direction of GBP/USD.
Initial jobless claims are a sensitive indicator of labor market conditions. An increase in claims may signal slower economic growth and a deterioration in employment conditions. Conversely, a decline in the indicator would be viewed as confirmation of the resilience of the U.S. economy. Mary Daly's speech will provide an opportunity to hear her assessment of the current economic environment and future prospects. Recently, FOMC members have frequently adopted a hawkish stance, and Daly may echo that view, which would be supportive of the U.S. dollar.
As for the intraday strategy, I will primarily rely on the implementation of Scenarios No. 1 and No. 2.
Buy Signal
Scenario No. 1: Today, I plan to buy the pound when the price reaches the entry level around 1.3445 (green line on the chart), targeting a rise to 1.3480 (the thicker green line on the chart). Around 1.3480, I plan to close long positions and open short positions in the opposite direction, targeting a 30–35 point move from that level. Further gains in the pound today can be expected only if U.S. data comes in weaker than forecast. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to move higher.
Scenario No. 2: I also plan to buy the pound today if there are two consecutive tests of the 1.3425 level while the MACD indicator is in oversold territory. This will limit the pair's downward potential and trigger a reversal to the upside. In this case, a rise toward the opposite levels of 1.3445 and 1.3480 can be expected.
Sell Signal
Scenario No. 1: I plan to sell the pound today after a break below the 1.3425 level (red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 1.3390, where I plan to close short positions and immediately open long positions in the opposite direction, targeting a 20–25 point rebound from the level. Pressure on the pound is likely to return today if the U.S. data comes in strong. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to move lower.
Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of the 1.3445 level while the MACD indicator is in overbought territory. This will limit the pair's upward potential and trigger a reversal to the downside. In this case, a decline toward the opposite levels of 1.3425 and 1.3390 can be expected.
Chart Explanation:
- Thin green line – the entry price at which the trading instrument can be bought;
- Thick green line – the estimated level where Take Profit orders can be placed or profits can be locked in manually, as further gains above this level are unlikely;
- Thin red line – the entry price at which the trading instrument can be sold;
- Thick red line – the estimated level where Take Profit orders can be placed or profits can be locked in manually, as further declines below this level are unlikely;
- MACD indicator – when entering the market, it is important to use overbought and oversold zones as guidance.
Important. Beginner Forex traders should exercise extreme caution when making market-entry decisions. It is best to stay out of the market ahead of major fundamental reports in order to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize potential losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not apply proper money management and trade large volumes.
Remember that successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based solely on the current market situation is inherently a losing strategy for an intraday trader.
