Trade Analysis and Trading Tips for the British Pound

The test of the 1.3417 price level occurred just as the MACD indicator was beginning to move upward from the zero line, confirming that the entry point for buying the pound was appropriate. However, the pair rose by just 10 points before the upward move came to an end.

The pound now faces a challenging US trading session. The Job Openings and Labor Turnover Survey (JOLTS) report is due, providing insight into how strongly US companies need additional employees. The forecast stands at 7.11 million, compared with the previous reading of 7.08 million. A higher result would strengthen the view that labor market conditions allow the Federal Reserve to keep interest rates elevated. The RCM/TIPP Economic Optimism Index will follow, with a decline to 46.2 from 46.8 expected. Combined with strong factory orders and job openings data, this could increase pressure on risk-sensitive assets, putting GBP/USD among the currency pairs likely to suffer from stronger demand for the US dollar.

However, the main event of the day is the congressional election. If Trump loses control of Congress, he may begin taking unexpected actions, which could weigh on the US dollar. Another factor to watch is the possibility that the United States and Israel could resume strikes against Iran after the election, as reported by US media.

As for the intraday strategy, the focus will be primarily on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: The plan is to buy the pound today if the price reaches the entry level around 1.3419 (the green line on the chart), with an upward target of 1.3444 (the thicker green line on the chart). Around 1.3444, the buy position will be closed and a sell position opened in the opposite direction, targeting a 30–35-point move downward from that level. Further gains in the pound today may be expected if US economic data are weaker than anticipated. Important: Before buying, make sure that the MACD indicator is above the zero line and has only just begun to rise from it.

Scenario No. 2: The pound can also be bought today if the price tests the 1.3405 level twice consecutively while the MACD indicator is in oversold territory. This would limit the pair's downward potential and could trigger an upward market reversal. A rise toward the opposite levels of 1.3419 and 1.3444 can then be expected.

Sell Signal

Scenario No. 1: The plan is to sell the pound today after the price breaks below 1.3405 (the red line on the chart), which could trigger a rapid decline in the pair. The sellers' main target will be 1.3373, where the sell position will be closed and a buy position opened immediately in the opposite direction, targeting a 20–25-point move upward from that level. Stronger pressure on the pound is likely to return if US economic data are stronger than expected. Important: Before selling, make sure that the MACD indicator is below the zero line and has only just begun to decline from it.

Scenario No. 2: The pound can also be sold today if the price tests the 1.3419 level twice consecutively while the MACD indicator is in overbought territory. This would limit the pair's upward potential and could trigger a downward market reversal. A decline toward the opposite levels of 1.3405 and 1.3373 can then be expected.

What the Chart Shows

• Thin green line – the entry price at which the trading instrument can be bought.
• Thick green line – the estimated price level at which a Take Profit order can be placed or profits can be closed manually, as further gains above this level are considered unlikely.
• Thin red line – the entry price at which the trading instrument can be sold.
• Thick red line – the estimated price level at which a Take Profit order can be placed or profits can be closed manually, as further declines below this level are considered unlikely.
• MACD indicator – when entering the market, it is important to take overbought and oversold conditions into account.

Important: Beginner Forex traders should make entry decisions with great caution. It is generally best to stay out of the market ahead of major fundamental data releases to avoid exposure to sharp exchange rate fluctuations. If trading during news releases, always use stop-loss orders to limit potential losses. Without stop-loss orders, the entire trading account can be depleted very quickly, particularly if risk management rules are not followed and large position sizes are used.

It is also important to remember that successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based on current market conditions is fundamentally a losing strategy for an intraday trader.