Analysis of Trades and Trading Advice for the British Pound

The price test of 1.3449 occurred when the MACD indicator had just started moving downward from the zero line, confirming that this was the correct entry point for selling the pound. As a result, the pair declined toward the target level of 1.3434.

The direction of the pound today will be determined by the July U.S. labor market report, as there are no significant domestic catalysts for the British currency today. The key figures will be the change in nonfarm employment, as well as the unemployment rate and average hourly earnings. Wage growth is also important, as it is directly linked to inflation and, through it, affects the likely path of the Fed's interest rate. The faster Americans' earnings increase, the greater the chances of tighter monetary policy by the regulator.

The picture will be complemented by a speech from FOMC member Thomas Barkin, whose comments will be scrutinized by the market for indications of the Fed's stance, making the day even more significant for the dollar. Under these conditions, the pound becomes dependent on external factors. If the data are strong, demand for the dollar will increase, putting additional pressure on GBP/USD, while a weak report will weaken the U.S. currency and support the pound.

As for the intraday strategy, I will focus more on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the pound when the entry point is reached around 1.3443 (the green line on the chart), with a target of a rise toward 1.3481 (the thicker green line on the chart). Around 1.3481, I will exit the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. A rise in the pound today can be expected only following weak U.S. data. Important! Before buying, make sure that the MACD indicator is above the zero line and has only just started rising from it.

Scenario #2: Today, I also plan to buy the pound if the price tests 1.3424 twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. A rise toward the opposite levels of 1.3443 and 1.3481 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell the pound after the 1.3424 level is broken, which should lead to a rapid decline in the pair. The key target for sellers will be 1.3386, where I will exit the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Downward pressure on the pound will return today following strong data. Important! Before selling, make sure that the MACD indicator is below the zero line and has only just started declining from it.

Scenario #2: Today, I also plan to sell the pound if the price tests 1.3443 twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.3424 and 1.3386 can be expected.

What Is Shown on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the expected price at which Take Profit can be placed or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the expected price at which Take Profit can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to use the overbought and oversold zones as a guide.

Important. Beginner Forex traders need to be very cautious when making entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire account balance very quickly, especially if you do not use proper money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making trading decisions spontaneously based on the current market situation is inherently a losing strategy for an intraday trader.