Trade Review and Tips for Trading the British Pound

The test of the 1.3225 level occurred just as the MACD indicator was beginning to rise from the zero mark, confirming a valid market entry point. As a result, the pound rose by 25 points, after which pressure on the pair returned.

Due to mixed UK labor market data, the pound failed to rally significantly. A slower increase in jobless claims was offset by weak wage growth. Investors were left confused, trying to interpret these conflicting signals. On one hand, the drop in claims pointed to a resilient labor market—usually a positive for the national currency. On the other hand, the slowdown in wage growth suggested a possible weakening in consumer demand and inflationary pressures, potentially limiting the Bank of England's room to raise interest rates.

Later today, we'll see the Empire Manufacturing Index and U.S. Import Price Index releases, which could support further pound growth. However, several key factors could shift this emerging trend. First, the technical picture: GBP has reached key resistance levels, and further growth may be capped by profit-taking from major players. A pullback or consolidation around current levels is quite likely before the uptrend continues. Second, the geopolitical environment and Trump's stance on tariffs. Global economic uncertainty and political risks could trigger flight to safer assets at any moment. But if U.S. data disappoints, traders will likely seize the opportunity to continue buying the pound.

As for intraday strategy, I will rely primarily on Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today at around 1.3238 (green line on the chart) with the goal of rising to 1.3288 (thicker green line). Around 1.3288, I will exit long positions and open shorts in the opposite direction, expecting a 30–35 point pullback from that level. Today's pound growth is expected to continue as part of the overall uptrend.Important! Before buying, make sure the MACD indicator is above the zero line and just starting to rise.

Scenario #2: I also plan to buy the pound if there are two consecutive tests of the 1.3205 level, while MACD is in the oversold zone. This would limit the pair's downward potential and suggest a reversal upward. Expect a move toward 1.3238 and 1.3288.

Sell Signal

Scenario #1: I plan to sell the pound after the price breaks below 1.3205 (red line), which should lead to a quick drop in the pair. The key target for sellers will be 1.3168, where I will exit short positions and open immediate long positions in the opposite direction, targeting a 20–25 point rebound. Sellers may show strength if U.S. data is strong.Important! Before selling, make sure the MACD indicator is below the zero line and just beginning to fall.

Chart Guide:

• Thin green line – the price level at which buying the instrument is recommended.
• Thick green line – a suggested take-profit level where further growth is unlikely.
• Thin red line – the price level at which selling the instrument is recommended.
• Thick red line – a suggested take-profit level where further decline is unlikely.
• MACD Indicator – when entering the market, use the overbought and oversold zones for confirmation.

Important Note for Beginner Traders:

Beginner Forex traders must make entry decisions with great caution. It is best to stay out of the market before major economic releases to avoid sharp price swings. If you do trade during news events, always use stop-loss orders to minimize potential losses. Without stop-losses, you can lose your entire deposit very quickly—especially if you don't practice money management and use large position sizes.

And remember: successful trading requires a well-defined trading plan, such as the one outlined above. Making spontaneous trading decisions based on current market movements is an inherently losing strategy for an intraday trader.