Trade Analysis and Recommendations for the British Pound

The 1.2976 price test occurred when the MACD indicator had already moved significantly below the zero mark, limiting the pair's downward potential. For this reason, I did not sell the pound.

Weak UK labor market data and a sharp increase in jobless claims put additional pressure on the British pound. Traders will continue to monitor macroeconomic indicators closely, as they serve as key signals for the state of the economy and potential monetary policy decisions by the Bank of England, which we will soon learn more about. The latest figures indicate slower job growth and rising unemployment, raising concerns about the sustainability of the UK's economic recovery. BoE Governor Andrew Bailey may address these concerns during his press conference today. These data points increase pressure on the Bank of England, which must now balance inflation control with economic growth support.

Today's U.S. economic data may exacerbate the pound's position. A decline in jobless claims would indicate a resilient labor market, while an increase in the Philadelphia Fed Manufacturing Index would suggest strength in the manufacturing sector, supporting the dollar. If the index falls, it could signal economic problems. The current account balance, which reflects the difference between exports and imports of goods and services, plays a role but has a limited impact on the currency market.

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

Buy Signal

Scenario #1: I plan to buy the pound today if the price reaches 1.2965 (green line on the chart), targeting a rise to 1.3037 (thick green line on the chart). At 1.3037, I will exit long positions and open sell trades, expecting a 30-35 point retracement. A pound rally today is possible within the uptrend. Important! Before buying, ensure the MACD indicator is above zero and just starting to rise.

Scenario #2: I also plan to buy the pound if there are two consecutive tests of the 1.2930 level, while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger a bullish reversal. The price could rise toward 1.2965 and 1.3037.

Sell Signal

Scenario #1: I plan to sell the pound after breaking below 1.2930 (red line on the chart), expecting a rapid decline in the pair. The key target for sellers will be 1.2865, where I will exit short positions and immediately open buy trades, expecting a 20-25 point retracement. Strong U.S. data could trigger this selling pressure. Important! Before selling, ensure the MACD indicator is below zero and just starting to decline.

Scenario #2: I also plan to sell the pound if there are two consecutive tests of the 1.2965 level, while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and trigger a bearish reversal, leading to a decline toward 1.2930 and 1.2865.

Chart Explanation:

• Thin green line – entry price for buy trades.
• Thick green line – estimated price where Take Profit can be placed, as further growth above this level is unlikely.
• Thin red line – entry price for sell trades.
• Thick red line – estimated price where Take Profit can be placed, as further decline below this level is unlikely.
• MACD indicator – traders should consider overbought and oversold zones when entering the market.

Important Note for Beginner Traders:

New traders in the Forex market should exercise caution when making entry decisions. It is best to stay out of the market before major fundamental reports to avoid sudden price swings. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop orders, you risk losing your entire deposit very quickly, especially if you trade large volumes without proper money management.

Remember, successful trading requires a clear trading plan, like the one provided above. Spontaneous decisions based on current market movements often lead to losses for intraday traders.