Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair tried to reach its local highs on the 30-minute timeframe again on Tuesday, and also 3-year highs at the same time, but nothing came of it. The pair traded both up and down during the day, but, unfortunately, not quite as we would like. There wasn't any signal on the 30-minute timeframe that deserved attended attention. The MACD indicator turned up twice, but both times it did so either far from the zero level or outside of business hours. And so, novice traders did not have to open positions on this timeframe. There is also nothing special to single out from the macroeconomic background, since there were no important events during the day. A few reports in the UK, a few reports in the US, but they all turned out to be completely secondary. Silvana Tenreyro, the representative of the Monetary Committee of the Bank of England, also said nothing important in the evening. And so, the pound remains close to its 3-year highs and even settled below the upward trend line. However, we do not recommend rushing short positions now. There is a possibility that the pair has started a flat.
5M chart of the GBP/USD pair
The pair traded more interestingly on the 5-minute timeframe. Four signals were formed during the day, all around the 1.4171 level. Unfortunately, this level was located exactly between the two peaks of the day, that is, traders had no opportunity to work out each entry into a new movement from the very beginning: the signal was formed somewhere in the middle of the movement. The first buy signal was formed at the beginning of the European session - a rebound from 1.4171. After that, the pair went up 27 points and began to fall. Thus, Take Profit could not be triggered here, and the deal was closed at breakeven by Stop Loss. Then a new buy signal was formed in the form of a rebound from the level of 1.4171, which should also be worked out, but it did not bring the proper profit, since this time the price went up even less. The deal closed at a loss of 11 points. The next two signals were not worth working out at all, since before that two false signals had already formed near the level of 1.4171. And so, despite the rather high volatility, it turned out to be far from the most successful day for trading.
Trading tips for Wednesday:
The situation is confusing on the 30-minute timeframe, as the upward trend line was overcome, but the downward movement did not start. And the whole picture is becoming more and more like a flat every day. It is because of the flat that the MACD indicator cannot form a strong signal for several days in a row. It is also unclear which direction to trade in the flat. Therefore, we advise you to temporarily not track signals from MACD on this timeframe. The important levels on the 5 minute timeframe are 1.4081, 1.4110, 1.4171, 1.4210 and 1.4233. The price can rebound off them or surpass them. As before, we set Take Profit at a distance of 40-50 points. You can use all the nearest levels as targets at the 5M TF, but then you need to take profit, taking into account the strength of the movement. When passing 20 points in the right direction, we recommend setting Stop Loss to breakeven. No major macroeconomic events are scheduled for Tuesday in the UK and the US, so novice traders will again have to trade on pure technique.
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.
