Analysis of Trades and Trading Tips for the British Pound

The test of 1.2607 occurred when the MACD indicator began moving upward from the zero mark, confirming a valid buying entry point and resulting in a 15-point increase.

Labor market data from the UK failed to support the pound's continued growth. On one hand, a stable unemployment rate suggests some resilience in the UK economy. On the other, a sharp rise in jobless claims is cause for concern. The uncertainty surrounding future Bank of England decisions is prompting traders to remain cautious.

During the US session, no major economic data is expected. The Empire Manufacturing Index and NAHB Housing Market Index are unlikely to have a significant impact on traders. Instead, geopolitical factors will take center stage, overshadowing macroeconomic data. Any positive developments in US-Russia negotiations regarding Ukraine could spark a sharp rally in risk assets, while further escalation could trigger a market sell-off.

For intraday trading, I will focus on Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: Buy GBP/USD at 1.2618, targeting 1.2662. At 1.2662, I plan to exit long positions and sell the pound, expecting a 30-35 point pullback. The pound's upward movement today depends on dovish comments from Federal Reserve officials. Important: Before buying, ensure the MACD indicator is above zero and just beginning to rise.

Scenario #2: Buy GBP/USD if 1.2590 is tested twice, with MACD in the oversold zone. This will limit downward potential and trigger a market reversal upward. The expected targets are 1.2618 and 1.2662.

Sell Signal

Scenario #1: Sell GBP/USD at 1.2590, targeting 1.2556. At 1.2556, I will exit short positions and buy for a 20-25 point pullback. Selling pressure is likely to emerge if Federal Reserve officials take a hawkish stance. Important: Before selling, ensure the MACD indicator is below zero and just beginning to decline.

Scenario #2: Sell GBP/USD if 1.2618 is tested twice, with MACD in the overbought zone. This will limit upward potential and cause a market reversal downward. The expected targets are 1.2590 and 1.2556.

Key Chart Levels

• Thin green line: Entry price for buying.
• Thick green line: Estimated Take Profit level or area where profit-taking is recommended, as further upside is unlikely.
• Thin red line: Entry price for selling.
• Thick red line: Estimated Take Profit level or area where profit-taking is recommended, as further downside is unlikely.
• MACD Indicator: Used to assess overbought and oversold conditions before entering trades.

Important Notes for Beginner Traders

New traders in the Forex market should exercise caution when making trade entries. Before major economic reports, it is best to stay out of the market to avoid unexpected volatility. If you choose to trade during news releases, always use stop-loss orders to minimize losses. Without stop-loss protection, a trader can quickly deplete their account, especially when trading large volumes without risk management.

For successful trading, a clear trading plan is essential, similar to the one outlined above. Making impulsive trading decisions based on short-term market movements is a losing strategy for intraday traders.