Analysis of Trades and Tips for Trading the British Pound

The test of the price at 1.3678 occurred when the MACD indicator had dropped significantly from the zero mark, which limited the pair's downward potential. For this reason, I did not sell the pound.

The pound plunged after news that 130,000 jobs were created in the US last month, and the unemployment rate fell to 4.3%. All of this was much better than economists' forecasts. This news sent a strong signal to global markets, prompting an immediate reaction in currency markets. The dollar strengthened amid expectations that strong labor market data might prompt the Federal Reserve to abandon its near-term plans for rate cuts.

Today, key economic data for the UK are anticipated, which could lead to significant fluctuations in currency rates and affect investor sentiment. In particular, data on the change in the country's GDP for December will be released. These indicators are fundamental markers of the condition of the economy, demonstrating its overall rise or regression. Alongside the GDP data, the market community is also awaiting information regarding the dynamics of industrial production. This indicator reflects the movement of the manufacturing sector, which plays a vital role in overall economic activity. Positive trends in manufacturing and overall GDP will lead to a strengthening of the pound.

Regarding the intraday strategy, I will primarily rely on Scenarios #1 and #2.

Buy Scenarios

• Scenario #1: I plan to buy the pound today upon reaching the entry point around 1.3626 (green line on the chart), targeting a move to 1.3661 (thicker green line on the chart). Near 1.3661, I intend to exit my long positions and open shorts in the opposite direction (anticipating a 30-35-pip move in the opposite direction from the level). One can expect the pound to rise today on the back of forthcoming good data. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting to rise from it.
• Scenario #2: I also plan to buy the pound today if the price tests 1.3601 twice in a row while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. An increase towards the opposing levels of 1.3626 and 1.3661 can be expected.

Sell Scenarios

• Scenario #1: I plan to sell the pound today after it breaks the 1.3601 level (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the level of 1.3567, where I intend to exit my shorts and immediately buy in the opposite direction (anticipating a movement of 20-25 pips in the opposite direction from the level). Pound sellers will come into play if the price fails to break above the daily highs. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting to decline from it.
• Scenario #2: I also plan to sell the pound today if the price tests 1.3626 twice in a row while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decrease towards the opposing levels of 1.3601 and 1.3567 can be expected.

What's on the Chart:

The thin green line represents the entry price at which one can buy the trading instrument;

The thick green line represents the approximate price where one can set Take Profit or secure profits, as further growth above this level is unlikely;

The thin red line represents the entry price at which one can sell the trading instrument;

The thick red line represents the approximate price where one can set Take Profit or secure profits, as further decline below this level is unlikely;

The MACD indicator: when entering the market, it is important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market should be very careful when making entry decisions. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.