Trade Review and Trading Advice for the British Pound

The price test at 1.3434 occurred at a moment when the MACD indicator had just begun moving upward from the zero line, which confirmed a valid entry point for a long position in the pound. As a result, the pair rose toward the target level of 1.3456.

In the second half of the day, we will receive the U.S. Nonfarm Payrolls data. Sustained employment growth typically indicates strong economic recovery, but economists expect the indicator to slow significantly compared to April. Weak figures may raise concerns about economic slowdown and lead to a decline in the U.S. dollar. The unemployment rate, in turn, reflects the overall labor market situation. A decline in unemployment is traditionally seen as a positive signal; however, a sharp drop may indicate an overheating labor market and potential inflationary pressure. Finally, changes in average hourly earnings play a critical role in assessing inflation risks. Rapid wage growth can stimulate higher consumer spending, which in turn may fuel inflation—something negative for the Federal Reserve and may force it to maintain a relatively tight monetary policy stance.

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

Buy Signal

Scenario #1:

Today, I plan to buy the pound when the entry point is reached around 1.3468 (green line on the chart), targeting a rise toward 1.3510 (thicker green line on the chart). At 1.3510, I will exit long positions and open short positions in the opposite direction, expecting a 30–35 point pullback. A rise in the pound today is only possible if U.S. data is weak. Important! Before buying, ensure that the MACD indicator is above the zero line and has just started rising from it.

Scenario #2:

I will also consider buying the pound if there are two consecutive tests of the 1.3448 level while the MACD indicator is in oversold territory. This would limit downward potential and trigger a reversal to the upside. In this case, a move toward 1.3468 and 1.3510 can be expected.

Sell Signal

Scenario #1:

I plan to sell the pound after a breakdown below 1.3448 (red line on the chart), which would lead to a quick decline in the pair. The key target for sellers is 1.3390, where I will exit short positions and open long positions in the opposite direction, expecting a 20–25 point rebound. Selling pressure is expected to return in the case of strong U.S. data. Important! Before selling, ensure that the MACD indicator is below the zero line and has just started declining from it.

Scenario #2:

I will also consider selling the pound if there are two consecutive tests of the 1.3468 level while the MACD indicator is in overbought territory. This would limit upward potential and trigger a reversal to the downside. In this case, a decline toward 1.3448 and 1.3390 can be expected.

What is shown on the chart:

• Thin green line – entry price for buy trades
• Thick green line – estimated take-profit level or manual profit-taking zone, as further upside above this level is unlikely
• Thin red line – entry price for sell trades
• Thick red line – estimated take-profit level or manual profit-taking zone, as further downside below this level is unlikely
• MACD indicator – trading decisions should be guided by overbought and oversold zones

Important Note

Beginner Forex traders should be extremely cautious when entering the market. Before the release of important fundamental data, it is best to stay out of the market to avoid sharp volatility. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss protection, you may quickly lose your entire deposit, especially if proper money management is not used and large position sizes are traded.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are inherently a losing strategy for intraday traders.