Hourly chart of the GBP/USD pair
The GBP/USD pair just continued its upward movement on Monday. No correction, no pullback. Where the movement ended on Friday, is also where trading began on Monday night. As if there were no days off. Thus, on the one hand, we have a strong upward trend that would seem to be easy to work out. On the other hand, there have been no new buy signals since Monday. The price did not try to approach the trend line, and the MACD indicator did not go down to the zero level. Thus, our trading strategy for beginners, which assumes simple indicators, simple patterns and simple signals, has not formed a single one on such a strong movement. And here it is worth making a digression. Any trading system works well on only one type of movement. There are trading systems that work well on the trend, but are unprofitable in the flat. There are trading systems that allow you to make money in the flat, but do not bring profit on the trend. Likewise, many trading systems trade well in the classic "trend momentum - correction" movement and poorly in the "trend momentum - trend momentum - low pullback" movement. Thus, we advise you to not get upset because such a strong movement could not be worked out. It is worth remembering that it is not always possible to open deals every day, and the rules of the trading system should be followed unquestioningly, otherwise you can get losses.
There were no major publications or reports in the UK on Monday. Therefore, it is extremely difficult to explain the reason for the pound's growth. Moreover, the pound/dollar pair has recently regularly updated its 2.5-year highs and is moving up almost without recoil. That is, on the face of an increase in movement, which should have been caused by something. But nothing like that happened on the weekend or on Monday. Thus, we are inclined to believe that the pound's growth is speculative. Something like how bitcoin has been growing in recent months.
No major publications or events in the UK and America on Tuesday, February 16. However, as we all see, now the pound/dollar pair does not need a foundation and macroeconomics to continue its upward movement. Therefore, tomorrow you will have to trade on technical signals again, without fear that they will be interrupted by any fundamental events.
Possible scenarios on February 16:
1) You are advised to consider long positions, since an upward trend line has been formed. However, the movement is practically recoilless, so signals are generated infrequently. Beginners need to wait for the price to rebound from the trend line or the MACD indicator to discharge to the zero level and a new buy signal is formed. The targets will be around the resistance level of 1.3915.
2) Short positions are irrelevant at the moment, since an upward trend has formed. However, if the price settles below the trend line, then the downward movement may continue within, at least, a correction. Therefore, in this case, you are advised to open short positions while aiming for the support level of 1.3796.
On the chart:
Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.
Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.
The MACD indicator consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).
Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.
Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.
