Review of Trades and Trading Tips for the British Pound

The test of the 1.3419 level occurred when the MACD indicator was just beginning to move upward from the zero line, confirming a favorable entry point for buying the pound. However, the pound rose by only 10 points.

Strong economic data limited the pound's upside, but they also failed to provide significant support for the US dollar, despite signs of resilience in the US labor market. The number of job openings remained at 7.5 million in September, hiring totaled 5.4 million, and voluntary quits increased to 3.4 million, indicating workers' confidence. Nevertheless, the dollar remains under pressure. The midterm election results gave the Democrats a majority in both chambers of Congress, which will convene in early January. Concerns surrounding Iran have added to the uncertainty, pushing strong economic data into the background.

Today, the focus will shift to UK economic data. The market will receive the final October Services Business Activity Index and Composite PMI readings, with both indicators expected to stand at 53.1, in line with their preliminary estimates. For comparison, the Services PMI stood at 52.1 in September, while the Composite PMI came in at 52.0. In addition to the improvement in these figures, the preliminary report contained several encouraging details. New business increased at its fastest pace in two years, while employment expanded for the first time in the same period following two years of contraction. These details suggest that the recovery is supported by genuine demand rather than temporary factors.

Another positive factor is that the manufacturing sector has also performed well, with the Manufacturing PMI rising to 52.8 from 51.9 in September. If the final services data confirm the preliminary estimates, the pound will have a basis for holding its ground, while a stronger-than-expected reading would encourage further buying. At the same time, rising raw material and transportation costs, highlighted in the preliminary report, continue to pose a risk of inflationary pressure, prompting closer attention to companies' costs. GBP/USD is expected to react primarily to deviations from forecasts today, while figures in line with expectations are likely to result in subdued trading until the US session.

Regarding the intraday strategy, the main focus will be on implementing Scenarios #1 and #2.

Buy Signals

Scenario #1: The plan is to buy the pound today when the price reaches the entry level around 1.3466 (the thin green line on the chart), targeting a rise toward 1.3495 (the thicker green line on the chart). Around 1.3495, the plan is to close long positions and open short positions, targeting a move of 30–35 points in the opposite direction from that level. Further gains in the pound today can be expected if the bullish market trend continues. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario #2: The pound can also be bought today if the price tests the 1.3449 level twice consecutively while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger an upward market reversal. A rise toward the opposite levels of 1.3466 and 1.3495 can then be expected.

Sell Signals

Scenario #1: The plan is to sell the pound today after the price breaks below the 1.3449 level (the red line on the chart), which could trigger a rapid decline in the pair. The sellers' key target will be 1.3429, where the plan is to close short positions and immediately open long positions, targeting a rebound of 20–25 points in the opposite direction from that level. Negative news could restore downward pressure on the pound. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario #2: The pound can also be sold today if the price tests the 1.3466 level twice consecutively while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a downward market reversal. A decline toward the opposite levels of 1.3449 and 1.3429 can then be expected.

What the Chart Shows

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

Important. Beginner Forex traders should exercise extreme caution when making market entry decisions. Before the release of important fundamental reports, it is generally best to stay out of the market to avoid exposure to sharp exchange rate fluctuations. If trading during news releases, always use stop-loss orders to minimize potential losses. Without stop-loss orders, the entire trading account can be lost very quickly, especially when proper money management is not applied and position sizes are large.

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