Trade review and trading tips for the British pound

The price test at 1.3482 occurred as the MACD indicator began moving up from the zero line, confirming a good entry point to buy the pound. As a result, the pair rose by 15 pips.

For the pound, the key event was UK labor-market data, which were frankly mixed: a sharp jump in jobless-claim filings triggered an initial wave of GBP/USD selling, but the unemployment rate held at 4.9%, failing to confirm market fears of a more serious deterioration. That stability in the headline unemployment rate, in my view, prevented a deeper sell-off since the market traditionally places more weight on that metric than on volatile weekly claims. In the second half of the day, sterling regained ground after the US Empire State manufacturing index for September fell 13 points to 7.6.

Today all traders' attention on GBP/USD will be on the UK consumer-price index and its core component, which could set the pair's direction even before the Federal Reserve decision in the evening. Inflation data are especially important for the pound because they largely determine the Bank of England's future rhetoric: persistently high inflation leaves the BoE less room to ease, while slowing inflation loosens the hands of doves. If the figures print noticeably above forecasts for both headline CPI and core, I believe sterling will have a good reason to recover against the dollar already in the first half of the day. An upside surprise to inflation traditionally increases expectations for BoE rate hikes and can temporarily divert the market's attention from the Fed meeting theme.

For intraday strategy, I will rely mainly on Scenarios No. 1 and No. 2.

Buy scenarios

Scenario No. 1: I plan to buy the pound today if price reaches the entry area around 1.3499 (green line on the chart), targeting a rise to 1.3532 (the thicker green line). Around 1.3532, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip swing from that level). Expect sterling strength today only after a very strong inflation print. Important: before buying, ensure the MACD indicator is above the zero line and only beginning to rise.

Scenario No. 2: I also plan to buy the pound today in case of two consecutive tests of 1.3482 while the MACD is in oversold territory. That would limit the pair's downside potential and lead to an upward reversal. One can expect moves to the opposite levels 1.3499 and 1.3532.

Sell scenarios

Scenario No. 1: I plan to sell the pound after a break below 1.3482 (red line on the chart), which would lead to a quick decline in the pair. The sellers' key target will be 1.3453, where I plan to exit shorts and immediately open longs in the opposite direction (expecting a 20–25 pip reversal from that level). Bad news will restore pressure on the pound. Important: before selling, ensure the MACD indicator is below the zero line and only beginning to fall.

Scenario No. 2: I also plan to sell the pound today in case of two consecutive tests of 1.3499 while the MACD is in overbought territory. This would limit the pair's upside potential and trigger a downward reversal. Expect a decline to the opposite levels of 1.3482 and 1.3453.

What to Look for on the Chart:

• Thin Green Line – Entry price at which you can buy the trading instrument;
• Thick Green Line – Estimated price where you can set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin Red Line – Entry price at which you can sell the trading instrument;
• Thick Red Line – Estimated price where you can set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it's important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to stay out of the market ahead of significant fundamental reports to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not employ money management practices and trade large volumes.

Also, remember that successful trading requires a clear trading plan, similar to the one provided above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.