Analyzing Wednesday's trades:
GBP/USD on 30M chart
The GBP/USD extended declines on Wednesday. As shown above, the pound continues to show losses, and it doesn't stop during the day or night, but the decline has been gradual. Weak but quite stable, and on a daily basis at that. Thus, the pound continues to see negativity, as we have forecasted for many months. Following 5-6 months of baseless growth, the British pound has been in exactly the same decline for two months now. It seems fair.
There were no important macroeconomic or fundamental events in the UK. A relatively important report on durable goods orders was published in the United States, and its value turned out to be better than expected. One might think that the US dollar logically rose on Wednesday, but the market's reaction to this report was practically nonexistent, and volatility was also low. At the same time, the euro was falling much more actively, so it is unlikely that this report had any influence on the dollar's movement.
GBP/USD on 5M chart
The 5-minute chart shows that the pound stayed near the level of 1.2143 in a complete flat for most of the day. This is how both pairs move every day. It's quite unusual because there are no bullish corrections in sight. For instance, the pair stalled for a bit, but then the decline resumed. It was not advisable to open any positions while the market stood still, but how could anyone know that there would be a pause when the pound was falling continuously every day? Unfortunately, there was no way to know. Beginners could open one or two trades near the level of 1.2143, each of which resulted in a small loss. As we can see, such a one-sided, one-way, non-corrective trend isn't good for traders. It is advisable to trade for the medium term.
Trading tips on Thursday:
On the 30-minute chart, GBP/USD continues to gradually fall. In the near future, a small correction is possible (simply because it is necessary for technical reasons), but we expect the pound to continue falling in the long run. At the moment, there are no signs of a correction, and the GBP/USD pair provides negative trading even without a fundamental or macroeconomic backdrop. The key levels on the 5M chart are 1.1992-1.2008, 1.2065-1.2079, 1.2143, 1.2171-1.2179, 1.2235, 1.2307, 1.2372-1.2394, 1.2457-1.2488, 1.2544, 1.2605-1.2620, 1.2653, 1.2688. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. There are no scheduled important events for the day, but market participants may keep an eye on the US weekly Jobless Claims report and the third revision of US GDP, as well as Federal Reserve Chair Jerome Powell's speech late at night.
Basic trading rules:
1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.
2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.
3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.
4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.
5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.
6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.
How to read charts:
Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.
Red lines are channels or trend lines that display the current trend and show which direction is better to trade.
MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines.
Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, 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 should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.
