Analysis of trades and advice on trading the British pound

The test of the 1.3038 price occurred when the MACD indicator had just started moving upward from the zero line, confirming the correct entry point for buying the pound — but the pair failed to show any significant growth afterward.

The UK Services PMI for October rose to 52.3, exceeding economists' forecasts. This unexpected increase in service-sector activity was a pleasant surprise for the market, weary of pessimistic forecasts and statements from British politicians. Surpassing the 50-point threshold, which separates growth from contraction, indicates that, contrary to expectations, the UK services sector is showing signs of revival. The pound's reaction to this positive data was therefore quite natural.

From this point on, everything will depend on the U.S. ISM Services PMI and the ADP employment change data. The financial markets rarely react strictly according to forecasts — a variety of factors, from geopolitical developments to speculative sentiment, influence currency fluctuations. Therefore, even very weak ADP and ISM readings do not guarantee a sustained rise in the pound. What matters is how the market as a whole interprets these figures and compares them with expectations. If weak data are already priced in by the consensus forecast, the actual figures may have less of an impact.

As for the intraday strategy, I will focus primarily on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the pound today when the price reaches the 1.3044 entry point (green line on the chart), targeting growth toward 1.3074 (thicker green line on the chart). Around 1.3074, I plan to exit long positions and open short ones in the opposite direction, expecting a 30–35-point retracement from that level. You can count on pound growth today only if U.S. labor market data turn out to be very weak.Important! Before buying, make sure the MACD indicator is above the zero line and just beginning to rise from it.

Scenario #2: I also plan to buy the pound today in case of two consecutive tests of the 1.3024 level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. Growth toward 1.3044 and 1.3074 can be expected.

Sell Signal

Scenario #1: I plan to sell the pound today after it breaks below the 1.3024 level (red line on the chart), which should trigger a quick decline in the pair. The key target for sellers will be 1.2996, where I plan to close sell positions and immediately open buys in the opposite direction, expecting a 20–25-point retracement from that level. The pound may fall sharply following strong U.S. data.Important! Before selling, make sure the MACD indicator is below the zero line and just beginning to decline from it.

Scenario #2: I also plan to sell the pound today in case of two consecutive tests of the 1.3044 level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal downward. A decline toward 1.3024 and 1.2996 can be expected.

Chart Legend:

• Thin green line – entry price where the trading instrument can be bought.
• Thick green line – projected price where a Take Profit can be placed or profits can be fixed manually, as further growth above this level is unlikely.
• Thin red line – entry price where the trading instrument can be sold.
• Thick red line – projected price where a Take Profit can be placed or profits can be fixed manually, as further decline below this level is unlikely.
• MACD indicator – when entering the market, it is important to pay attention to the overbought and oversold zones.

Important Note

Beginner Forex traders should make market entry decisions very cautiously. Before the release of important fundamental reports, it's best to stay out of the market to avoid being caught in sharp price swings. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you don't use money management and trade with large volumes.

And remember: for successful trading, you must have a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is, from the start, a losing strategy for intraday traders.