Trade analysis and guidance on trading the British pound

The price test at 1.3219 occurred when the MACD indicator had not even exited the negative zone, which clearly indicated the presence of a large number of sellers rather than buyers. For this reason, I did not buy the pound.

The absence of UK economic data led to a weak correction in the pair, and further decline in GBP/USD is likely. In the second half of the day, we are only expecting weekly initial jobless claims and the U.S. trade balance. Although these economic indicators may seem secondary, they have significant importance for short-term currency market dynamics. First, initial jobless claims provide an immediate snapshot of labor market conditions. A decline in this measure will support the U.S. dollar and trigger another wave of GBP weakness. Trade balance data will also be considered by traders in decision-making. If the data exceed forecasts, increased dollar buying against other major currencies can be expected.

For intraday strategy, I will primarily rely on scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today around the entry point of 1.3209 (thin green line on the chart) with a target of 1.3243 (thicker green line on the chart). Around 1.3243, I will exit long positions and open sales in the opposite direction (targeting a 30–35 point move from the level). Pound growth today can be expected only after weak U.S. data. Important: Before buying, ensure the MACD indicator is above zero and only just beginning to rise.

Scenario #2: I also plan to buy the pound if the price tests 1.3193 twice consecutively while the MACD is in oversold territory. This will limit the pair's downward potential and trigger a reversal upward. Growth toward 1.3209 and 1.3243 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after the price breaks 1.3193 (red line on the chart), which will lead to a rapid decline. The key target for sellers is 1.3164, where I will exit sales and immediately open buys in the opposite direction (targeting a 20–25 point reversal). Pressure on the pound could return at any time. Important: Before selling, ensure the MACD is below zero and only just beginning to fall.

Scenario #2: I also plan to sell the pound if the price tests 1.3209 twice consecutively while the MACD is in overbought territory. This will limit the pair's upward potential and trigger a downward reversal. A decline toward 1.3193 and 1.3164 can be expected.

Chart Overview

• Thin green line – entry price for buying the instrument;
• Thick green line – suggested level for Take Profit or manual profit-taking, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – suggested level for Take Profit or manual profit-taking, as further decline below this level is unlikely;
• MACD indicator – when entering the market, pay attention to overbought and oversold zones.

Important: Beginner Forex traders should exercise extreme caution when entering the market. It is best to stay out of the market before major fundamental reports to avoid sharp price swings. If you trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

Remember, successful trading requires a clear plan, like the one presented above. Making spontaneous trading decisions based solely on current market conditions is a losing strategy for intraday traders.