Testing the 1.2802 level occurred when the MACD indicator had already dropped significantly below the zero line, limiting the pair's downward potential. For this reason, I avoided selling. A second test of 1.2802 occurred while the MACD was in the oversold zone, enabling the implementation of Scenario #2 for buying. As a result, the pair rose by about 20 points before pressure on the pound resumed. Weak UK labor market data strengthens the argument for additional economic stimulus and further rate cuts. In the second half of the day, attention will shift to the speeches by FOMC members Christopher Waller and Thomas Barkin. A cautious stance on potential US rate cuts could trigger another pound sell-off and bolster the dollar. For my intraday strategy, I will primarily rely on Scenario #1 and Scenario #2.
Buy Signal
Scenario #1:Today, I plan to buy the pound near the 1.2837 level (green line on the chart), targeting a rise to 1.2886 (thicker green line on the chart). At 1.2886, I will exit purchases and open sales in the opposite direction, aiming for a 30-35 point move downward. A significant rise in the pound appears unlikely today.It is important to ensure the MACD indicator is above the zero line and just starting to rise before initiating a buy trade.
Scenario #2:I also plan to buy the pound if there are two consecutive tests of the 1.2802 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger an upward market reversal. A rise toward 1.2837 and 1.2886 can be expected.
Sell SignalScenario #1:I plan to sell the pound after breaking below the 1.2802 level (red line on the chart), which will likely lead to a sharp decline in the pair. The sellers' key target will be 1.2765, where I will exit sales and immediately open purchases in the opposite direction, aiming for a 20-25 point upward move. Sellers will likely become active if the pair fails to establish a meaningful correction.It is important to ensure the MACD indicator is below the zero line and just starting to decline before initiating a sell trade.
Scenario #2:I also plan to sell the pound if there are two consecutive tests of the 1.2837 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and trigger a downward market reversal. A decline toward 1.2802 and 1.2765 can be expected.