Trade Analysis and Recommendations for the British Pound

The test of the 1.3334 level occurred when the MACD indicator had just started to move down from the zero line, confirming a valid entry point for selling the pound, which led to a 20-point drop.

The pound continued to decline against the U.S. dollar but saw selling pressure ease after hitting a monthly low. The weakening of the British currency was driven by a combination of factors, including concerns over slowing economic growth in the UK and rising expectations of a rate cut by the Bank of England. However, after reaching the monthly low, GBP/USD's decline stalled sharply. Nevertheless, the fundamental factors weighing on the pound remain in place.

During the U.S. session, markets are expecting data on job openings and labor turnover from the U.S. Bureau of Labor Statistics, along with the Consumer Confidence Index and the trade balance in goods. Strong figures could reignite pressure on the pound. Close attention to labor market data is key to understanding the short-term direction of the pound. A steady increase in job openings and lower labor turnover reflect employers' confidence in the economic outlook, which typically supports the national currency. The Consumer Confidence Index, in turn, reflects consumers' willingness to spend, a key driver of economic growth. If the data comes in strong, renewed downward pressure on GBP/USD is likely.

For intraday trading, I will primarily rely on the execution of scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today if the price reaches the 1.3357 level (green line on the chart), targeting a rise to 1.3406 (thick green line). At 1.3406, I plan to exit long positions and open short positions in the opposite direction (expecting a 30–35 point pullback). Any upward movement in the pound today is likely to remain corrective. Important: Before buying, ensure the MACD indicator is above the zero line and just starting to rise.

Scenario #2: I also plan to buy the pound if the price tests 1.3331 twice in a row, while the MACD is in the oversold zone. This would limit the downward potential and lead to a reversal. Growth can be expected toward the opposite levels at 1.3357 and 1.3406.

Sell Signal

Scenario #1: I plan to sell the pound after the price breaks below 1.3331 (red line on the chart), which could trigger a sharp drop. The key target for sellers will be 1.3288, where I plan to exit short positions and open long positions in the opposite direction (expecting a 20–25 point rebound). Sellers are likely to act on any opportunity today. Important: Before selling, ensure the MACD indicator is below the zero line and just starting to decline.

Scenario #2: I also plan to sell the pound if the price tests 1.3357 twice in a row, while the MACD is in the overbought zone. This will likely cap the upward potential and lead to a reversal downward, with expected targets at 1.3331 and 1.3288.

What's on the chart:

• Thin green line – Entry price for buying the instrument.
• Thick green line – Suggested Take Profit level or a point to lock in profits; further upside above this level is unlikely.
• Thin red line – Entry price for selling the instrument.
• Thick red line – Suggested Take Profit level or a point to lock in profits; further downside below this level is unlikely.
• MACD Indicator – Entry decisions should be based on overbought/oversold zones.

Important Note for Beginner Forex Traders

Beginner traders should approach market entry decisions with extreme caution. It is generally advisable to stay out of the market before the release of major fundamental reports to avoid sharp price swings. If you choose to trade during news releases, always use stop-loss orders to minimize losses. Trading without stop-losses can quickly wipe out your entire deposit, especially if you disregard money management principles and use large lot sizes.

Remember: successful trading requires a well-defined plan, like the one provided above. Making spontaneous decisions based on current market conditions is a losing strategy for intraday trading.