Trade analysis and tips for the British pound

The test of 1.3216 occurred as the MACD indicator began moving up from the zero line, confirming a valid entry point to buy the pound. As a result, the pair rose toward the target area of 1.3245.

On Friday, the pound benefited from external weakness. The US September labor report was notably softer than expected; the dollar fell, and GBP/USD had room to recover after prolonged pressure. Job growth was well below economists' forecasts, and revisions to July and August worsened the picture. For the market, this means the US economy is losing momentum faster than thought, and the case for further Federal Reserve tightening weakens.

Today's publication is a chance for the pound to show character. Final services and composite PMIs for September will show how the UK economy entered autumn. Services make up the bulk of UK GDP, so their dynamics directly affect rate expectations. The internal structure of the reports is interesting: in August services cost inflation accelerated for the first time in four months due to fuel and transport, while firms continued to cut staff. If September confirms that balance — activity holding but costs rising — the market will see a mixed picture that supports rate expectations but burdens the employment outlook. If indicators are revised up, a modest pound attempt to rise is likely. I expect any move to be limited to the immediate reaction to the prints; for a more sustained advance, the pound needs clarity on the autumn budget, which is still absent.

For intraday strategy, I will rely mainly on Scenario 1 and Scenario 2 below.

Buy Scenarios

Scenario 1: Buy the pound today if price reaches the entry area around 1.3210 (green line) with a target of 1.3232 (thicker green line). Around 1.3232, plan to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip countermove). Expect pound strength only after good data. Important: before buying, ensure MACD is above zero and only beginning its rise.

Scenario 2: Also buy the pound if there are two consecutive tests of 1.3201 while MACD is in the oversold area. This would limit downside potential and trigger an upward reversal. Expect moves toward 1.3210 and 1.3232.

Sell Scenarios

Scenario 1: Sell the pound after the 1.3201 level is breached (red line). Target 1.3181, where I plan to exit shorts and immediately open longs in the opposite direction (expecting a 20–25 pip countermove). Bad news will put pressure back on the pound. Important: before selling, ensure MACD is below zero and only beginning its decline.

Scenario 2: Also sell if there are two consecutive tests of 1.3210 while MACD is in the overbought area. This would cap upside and trigger a downward reversal. Expect declines to 1.3201 and 1.3181.

What's on the chart:

Thin green line – entry price at which you can buy the trading instrument.

Thick green line – approximate price where you can place Take Profit or manually lock in profits, since further upside above this level is unlikely.

Thin red line – entry price at which you can sell the trading instrument.

Thick red line – approximate price where you can place Take Profit or manually lock in profits, since further downside below this level is unlikely.

MACD indicator. When entering the market, it is important to follow the overbought and oversold zones.

Important. Beginner traders in the Forex market must be very cautious when making entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders,, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.

Remember that successful trading requires a clear trading plan, like the example above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.