Trade breakdown and trading advice for the British pound

A price test at 1.3295 occurred at a time when the MACD indicator had just started moving downward from the zero line, which confirmed a valid entry point for selling the pound. As a result, the pair declined toward the target level of 1.3249.

Today's sharp increase in UK jobless claims put pressure on the British pound, even though the unemployment rate declined to 4.9%.

Next, we will see U.S. Initial Jobless Claims and the Philadelphia Fed Manufacturing Index. After these data releases, the market is likely to respond with a sharp strengthening of the U.S. dollar. Traders will assess the prospects of the U.S. economy, which continues to show resilience, while other major economies face slowdown. This creates a favorable environment for maintaining a strong U.S. dollar in the short term.

In such a scenario, the British pound will remain under additional pressure. Today's dovish rhetoric from the Bank of England, even without any change in interest rates, signals the regulator's willingness to support the economy, which reduces the attractiveness of the pound as an investment currency. The contrast with strong U.S. data further reinforces this dynamic.

As for the intraday strategy, I will mainly rely on scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today if the entry point at 1.3260 (green line on the chart) is reached, with a target at 1.3316 (thicker green line on the chart). At 1.3316, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move back). A strong upward move in the pound is unlikely today. Important! Before buying, ensure that the MACD indicator is above the zero line and has just started rising from it.

Scenario #2: I also plan to buy the pound if there are two consecutive tests of 1.3210 while the MACD is in oversold territory. This would limit downward potential and trigger a reversal to the upside. A move toward 1.3260 and 1.3316 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound after a break below 1.3210 (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers is 1.3146, where I will exit short positions and open long positions in the opposite direction (expecting a 20–25 point rebound). Selling pressure is expected to return in case of strong U.S. data. Important! Before selling, ensure that the MACD indicator is below the zero line and has just started moving downward.

Scenario #2: I also plan to sell the pound if there are two consecutive tests of 1.3260 while the MACD is in overbought territory. This would limit upward potential and lead to a downward reversal. A decline toward 1.3210 and 1.3146 can be expected.

What is shown on the chart:

• Thin green line – entry price for buying the instrument;
• Thick green line – projected take-profit level or manual profit-taking zone, as further upside above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – projected take-profit level or manual profit-taking zone, as further downside below this level is unlikely;
• MACD indicator – trading decisions should be guided by overbought and oversold zones.

Important: Beginner Forex traders must be extremely cautious when entering the market. Before major fundamental releases, it is best to stay out of the market to avoid sharp price volatility. If you choose to trade during news releases, always place stop-loss orders to minimize losses. Without stop-losses, you may quickly lose your entire deposit, especially if proper risk management is not used and large position sizes are traded.

And remember: successful trading requires a clear trading plan, similar to the one presented above. Spontaneous decision-making based on current market conditions is an inherently losing intraday trading strategy.