Analysis of Trades and Trading Tips for the British Pound

The test of the 1.3340 level occurred when the MACD indicator had just started moving upward from the zero line, confirming that it was the right time to enter a long position on the pound. As a result, the pair rose by 15 points.

The UK labor market data supported the pound, with the unemployment rate providing the main argument for buyers. In August, unemployment fell to 4.7%, although analysts had expected it to remain at 4.9%, unchanged from the previous month. This indicator is one of the key factors considered by the Bank of England, as low unemployment allows the regulator to focus on fighting inflation without risking significant damage to employment. Wage data presented a mixed picture. The main measure of average wage growth slowed to 3.7%, while the number of unemployment benefit claims increased by 30,300 in September.

The evening session will begin with US housing market data. The market will receive figures on building permits, housing starts, and pending home sales. These indicators help assess how high mortgage rates are affecting demand and construction activity. The forecasts are cautious. Building permits are expected to reach 1.400 million, compared with 1.403 million previously. Housing starts are projected at 1.310 million, up from 1.275 million, while pending home sales are expected to decline by 0.5% after rising by 0.3%. In addition, the evening session may be more eventful because of a speech by Megan Greene, who is among the advocates of tighter monetary policy. In July, she voted alongside Hugh Pill and Catherine Mann for an immediate rate hike, so the market will look for confirmation of this position. If her remarks are hawkish, the pound could receive support regardless of the US data.

As for the intraday strategy, greater emphasis will be placed on implementing Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, the pound can be bought when the price reaches the entry level around 1.3352 (the green line on the chart), with a target of 1.3385 (the thicker green line on the chart). Around 1.3385, the long position will be closed and a short position opened, targeting a move of 30–35 points in the opposite direction from that level. The pound may rise today if US data are weak. Important! Before buying, make sure that the MACD indicator is above the zero line and has just started rising from it.

Scenario No. 2: The pound can also be bought today if the price tests the 1.3335 level twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and trigger an upward market reversal. The pair could rise toward the opposite levels of 1.3352 and 1.3385.

Sell Signal

Scenario No. 1: Today, the pound can be sold after the price breaks below the 1.3335 level (the red line on the chart), which could lead to a rapid decline in the pair. The sellers' key target will be 1.3305, where the short position will be closed and a long position opened immediately in the opposite direction, targeting a 20–25-point move away from that level. Strong downward pressure on the pound could return if the data are strong. Important! Before selling, make sure that the MACD indicator is below the zero line and has just started falling from it.

Scenario No. 2: The pound can also be sold today if the price tests the 1.3352 level twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and trigger a downward market reversal. The pair could decline toward the opposite levels of 1.3335 and 1.3305.

What the Chart Shows

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

Important. Beginner Forex traders should be very cautious when making market-entry decisions. It is best to stay out of the market before the release of major fundamental reports to avoid exposure to sharp exchange-rate fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

Remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is a losing strategy for an intraday trader from the outset.