Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3645 price level occurred at a time when the MACD indicator had moved significantly below the zero mark. Nevertheless, the focus was on U.S. labor market data, which turned out to be much better than economists' forecasts, leading to a sell-off in the pound. As a result, the pair declined toward the target level of 1.3610. Buying from that level on a rebound allowed for an additional 30 pips of profit to be taken from the market.

U.S. economic indicators show steady growth, with the unemployment rate falling to an impressive 4.1% and the number of nonfarm jobs increasing by 147,000, surpassing expert expectations. This surge in labor market activity became a signal for strengthening the dollar's position in global financial markets. Traders will now closely monitor new statements from Federal Reserve officials and fresh macroeconomic data to assess the resilience of the current trend.

Today, we are expecting data on the UK Construction PMI Index. This indicator, which reflects business activity in the construction sector, is a crucial gauge of economic health, especially given the significant contribution of the construction sector to the country's GDP. A value above 50 indicates growth in activity.

Additionally, a notable event will feature a speech by Martin Taylor, a member of the Bank of England's Financial Policy Committee. Investors pay close attention to the rhetoric of FPC members. Taylor is expected to comment on the current economic situation in the UK, inflation risks, and prospects for economic growth. His views on these issues may influence market expectations and, accordingly, the dynamics of the pound. Therefore, today is a significant moment to assess the outlook for the UK economy. The data on the construction sector and Taylor's speech will provide valuable information for investors, allowing them to form more reasoned expectations regarding the country's economic future.

For intraday strategy, I will focus primarily on Scenarios #1 and #2.

Buy Scenario

Scenario #1: I plan to buy the pound today upon reaching the entry point around 1.3682 (indicated by the green line on the chart), targeting a rise toward 1.3723 (the thicker green line). Around 1.3723, I intend to exit long positions and open short positions in the opposite direction (aiming for a 30–35 pip pullback from the entry point). One can expect pound growth today only if the data is strong.

Important! Before buying, ensure that the MACD indicator is above the zero line and is just starting to rise from it.

Scenario #2: I also plan to buy the pound in the event of two consecutive tests of the 1.3654 level when the MACD indicator is in the oversold zone. This will limit the pair's downside potential and lead to an upward reversal. A rise toward the opposite levels of 1.3682 and 1.3723 can be expected.

Sell Scenario

Scenario #1: I plan to sell the pound today after a break below 1.3654 (red line on the chart), which will likely lead to a sharp drop in the pair. The key target for sellers will be 1.3610, where I plan to exit short positions and immediately open long positions in the opposite direction (aiming for a 20–25 pip bounce from that level). Selling the pound is advisable after weak data.

Important! Before selling, ensure that the MACD indicator is below the zero line and is just starting to decline from it.

Scenario #2: I also plan to sell the pound in the event of two consecutive tests of the 1.3682 level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.3654 and 1.3610 can be expected.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.