Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair moved in quite a chaotic matter on the 30-minute timeframe on Monday. The upward trend continues, which is signaled by the upward channel. However, the pair has somehow been changing its direction too often in the last two trading days (including today), which greatly complicates the trading process. Today, the MACD indicator generated only one buy signal, but it was formed in the evening, so it did not work out, although the pair went up by around 50 points after it was formed. And here's another distinctive feature - there were quite active trades at today's Asian session at night, which usually does not happen. In general, it was not the most successful and auspicious day. We managed to avoid losses on the 30-minute timeframe, since no signals were generated. But the situation is a little worse on the 5-minute timeframe.
5M chart of the GBP/USD pair
Five signals were formed on the 5-minute timeframe during the day, most of which were false. Let's start with the fact that four signals were formed at once around the 1.3913 level. In order to not analyze each one separately, let's say that novice traders could work out the first two signals, buy and sell. Unfortunately, they turned out to be false, which led to losses of 14 and 16 points. It was no longer necessary to work with this level, since two false signals eloquently show that the markets do not perceive this level as important. The last fifth signal formed around the 1.3865 level. The rebound from it was clear, worth working with it, but about half an hour before it was formed, a report on durable goods orders was published in America. This indicator was not in favor of the US dollar, as its value turned out to be below forecasts. Moreover, it is much lower. Accordingly, after it was published, one could expect the dollar to fall. And it happened, but upon closer examination it becomes clear that it began 35 minutes after the signal emerged. Thus, it is impossible to unequivocally say that the markets reacted to the report, and the signal itself did not work out either. However, with a high degree of probability, it would not have been possible to earn money on this signal, since the pair did not go up 40 points and did not manage to reach the nearest level of 1.3913.
How to trade on Tuesday:
On Tuesday, we recommend trading again according to the upward trend on the 30-minute timeframe. The pair continues to be inside the rising channel. And so, tomorrow it will be necessary to wait for new buy signals in the form of upward reversals of the MACD indicator or rebounds from the lower border of the channel. The indicator is now close to the zero level and can form potentially strong signals. In regards to reports, we only have the US consumer confidence indicator that is set to be published tomorrow, while the news calendar for Britain is empty. Thus, the macroeconomic background will have practically no effect on the pair's movement tomorrow. The important levels on the 5 minute timeframe are 1.3838, 1.3865, 1.3913, 1.3928 and 1.3947. The price can bounce off them or surpass them. As before, we set Take Profit at a distance of 40-50 points on a 30-minute timeframe, on a 5-minute timeframe, the target is the nearest level (if it is located more than 20 points). If the nearest level is too far away, then you are advised to maintain the deal in manual mode, tracking changes in the market. When passing 20 points in the right direction, we recommend setting Stop Loss to breakeven.
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.
