Trade analysis and trading advice for the British pound

Due to low market volatility, the levels I outlined were not tested in the first half of the day, so I did not enter any trades.

During the U.S. session, we expect the release of data on changes in U.S. nonfarm employment and the unemployment rate. These macroeconomic indicators will undoubtedly have a significant impact on further market movement, shaping trader sentiment ahead of the weekend.

Particular attention will be paid to the nonfarm payrolls figure. Strong growth in new jobs will confirm the resilience of the economic recovery, which may strengthen expectations of a more cautious approach by the Federal Reserve regarding interest rates. The unemployment rate is another cornerstone in labor market analysis. A decline in unemployment—especially if accompanied by job growth—will be a positive signal for the dollar.

Data on average hourly earnings and the services sector PMI are also important. An increase in average hourly wages may indicate inflationary pressure, which in turn could accelerate the Federal Reserve's decision to raise interest rates—especially considering current energy prices. As for the PMI index, a reading above 50 traditionally signals an expansion in business activity in the services sector, which dominates the U.S. economy.

As for the intraday strategy, I will rely more on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy the pound today when the price reaches the entry point around 1.3244 (green line on the chart), with a target of growth to 1.3282 (thicker green line on the chart). Around 1.3282, I plan to exit long positions and open short positions in the opposite direction (expecting a 30–35 point move in the opposite direction). Pound growth today can be expected only after weak U.S. data.Important! Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario No. 2: I also plan to buy the pound today in case of two consecutive tests of the 1.3220 level when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 1.3244 and 1.3282 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound today after the price breaks the 1.3220 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 1.3175, where I plan to exit short positions and immediately open long positions in the opposite direction (expecting a 20–25 point move upward from that level). Pressure on the pound may return at any moment.Important! Before selling, make sure the MACD indicator is below the zero line and just starting to decline from it.

Scenario No. 2: I also plan to sell the pound today in case of two consecutive tests of the 1.3244 level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.3220 and 1.3175 can be expected.

What's on the chart:

• Thin green line – entry price for buying the trading instrument
• Thick green line – estimated level to place Take Profit or lock in profits, as further growth above this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – estimated level to place Take Profit or lock in profits, as further decline below this level is unlikely
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones

Important

Beginner Forex traders should make market entry decisions very carefully. Before the release of major fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can quickly lose your entire deposit—especially if you do not use proper money management and trade with large volumes.

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