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The test of the 1.2301 level in the second half of the day coincided with the MACD indicator beginning its upward movement from the zero mark, confirming the validity of the entry point to buy the pound. However, given the prevailing downtrend, a strong rally did not materialize, and after recovering by an additional 15 pips, pressure on the pound resumed.
Analysts have noted that the active selling of the pound may be related to uncertainty surrounding upcoming economic data. Current market trends suggest potential fluctuations based on the results of the U.S. employment report, which is receiving particular attention today. Additionally, the pound's exchange rate may be affected by the political situation in the UK. Investors' concerns about possible changes in government strategy have heightened volatility in the forex market. Uncertainty regarding trade and other critical economic matters could also lead to further fluctuations.
Today's GDP data from NIESR may provide some guidance, but it is unlikely to provoke a reaction comparable to traditional economic growth reports. Traders are expected to exercise caution, interpreting NIESR's preliminary findings, especially if they deviate from broader economic trends.
For today's intraday strategy, I will primarily rely on the implementation of Scenarios #1 and #2.
Scenario #1: I plan to buy the pound today at the 1.2297 entry point (green line on the chart), targeting growth toward 1.2357 (thicker green line on the chart). Around 1.2357, I will exit the buy positions and open sell trades in the opposite direction, expecting a reversal of 30–35 pips from the level. The rise of the pound today is expected only within the corrective framework.
Important: Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise.
Scenario #2: I also plan to buy the pound in the event of two consecutive tests of the 1.2260 level when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger an upward market reversal. Expect growth toward the opposite levels of 1.2297 and 1.2357.
Scenario #1: I plan to sell the pound today after breaking below the 1.2260 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 1.2212, where I will exit the sell trades and immediately open buy trades in the opposite direction, expecting a rebound of 20–25 pips from the level. Selling the pound as high as possible is preferable, continuing the emerging bearish trend. Important: Before selling, ensure that the MACD indicator is below the zero mark and beginning to decline.
Scenario #2: I also plan to sell the pound in the event of two consecutive tests of the 1.2297 level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and trigger a downward market reversal. Expect a decline toward the opposite levels of 1.2260 and 1.2212.
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