Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair tried to resume the upward movement on Thursday. The price once again dipped to a new upward trend line and bounced off it. However, this rebound has already been worked out by the market, so tomorrow nothing will prevent the pair from falling to the trend line for the third time and settling below it. Moreover, tomorrow the macroeconomic background will be strong, so the volatility may be strong. However, to strengthen the US currency (that is, the fall of the pound/dollar pair), a strong NonFarm Payrolls report is required. If it turns out to be weak (the value is below the forecast +410,000 new jobs), then we can count on a new round of the dollar's fall and the growth of the euro/dollar and pound/dollar pairs. As for today, neither the British business activity index nor the US ISM business activity index provoked a clear market reaction. The pair continued to move both after the first report and after the second, but was it a reaction to the reports themselves? In the case of the US ISM – definitely not.
5M chart of the GBP/USD pair
The movement of the pound/dollar pair looks pretty good on the 5-minute timeframe. Mainly due to fairly good levels, around which trading signals were formed. We should immediately note that the 1.3489 level is today's low and it did not participate in the process of forming a signal on Thursday. Thus, we consider four signals near the level of 1.3521 and 1.3549. The first sell signal turned out to be false, as the pair managed to go down by only 22 points. The short position closed at breakeven on Stop Loss. The second long position turned out to be profitable, as the pair managed to grow to the nearest level of 1.3549 and bounce off it. Therefore, the long position should be closed in profit of about 13 points and immediately open a short position while aiming for 1.3521, to which the price dropped in 15 minutes. Accordingly, the short position also brought profit - about 15 points. The last buy signal - a rebound from the 1.3521 level - could no longer be traded, but even if novice traders decided otherwise, it also turned out to be profitable. Thus, the pound managed to earn several dozen points on Thursday, which, with a total volatility of 70 points, is a good result.
How to trade on Friday:
The upward trend persists on the 30-minute TF, but if the pair settles below the trendline tomorrow, then, most likely, a new downward trend will begin. Therefore, at this time, longs on this TF remain relevant. It is recommended to trade at the 5-minute TF at the levels of 1.3489, 1.3521, 1.3549, 1.3579, 1.3606. The price can rebound from these levels, or it can overcome them. As before, we set Take Profit at a distance of 40-50 points. At the 5M TF, you can use all the nearest levels as targets, 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. Tomorrow, the UK will publish only the PMI in the construction sector, the reaction to which can be a maximum of 20 points. Much more important reports are scheduled for the US trading session: NonFarm Payrolls and the unemployment rate.
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.
The MACD (14,22,3) 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 speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.
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.
