Hourly chart of the GBP/USD pair
The GBP/USD pair fell by 200 points, afterwards it quickly grew by 180 points. Thus, the nature of the pair's movement remains unchanged. It is very difficult, especially for novice traders, and is something that is between a flat and high-volatility movements when the pair is thrown from side to side. In fact, there is no trend right now (this is clearly seen from the chart). The pair is trading quite volatile, but in different directions. Moreover, after several attempts to continue the long-term upward trend, the pair's quotes returned to the 1.3292-1.3395 channel, already familiar to novice traders, in which the price had already spent a lot of time earlier. The pair's quotes rebounded off the borders of this channel by at least four times. It is strong and important. We suggest that you start trading from this channel in the coming days. Getting the price to settle above or below it can provoke a new round of upward or downward movement. At the same time, you should remember that when it moves erratically, the price changes its direction too often, which complicates the trading process.
Everything still revolves around Brexit and negotiations on a trade deal between the UK and the EU when it comes to the British pound. And we also found out that talks will resume. And that's it. No more information available. It is unclear how long this will last as both sides continue to state that "the next couple of days should be final." And how the parties want to have time to ratify the agreement on time is also generally unclear. It seems that the markets are tired of being optimistic and so the pound is slowly turning down. At the same time, it still cannot fall below the 1.3292 level. No other important information on Tuesday..
No major events or reports scheduled in the UK and the US on Wednesday. However, as shown on Monday, traders don't really need them now. Markets calmed down a bit on Tuesday, volatility slightly decreased, and the price was generally trapped in a horizontal channel. However, anything can happen in this situation. Especially if the markets finally receive official information on the progress of negotiations between London and Brussels.
Possible scenarios for December 9:
1) No particular trend at the moment, like any trend lines and channels. Therefore, although there is no trend now, there is no classic flat either. We advise you to wait a few days for a more convenient and better technical picture. Or, trade for an increase in small lots when the price settles above the 1.3395 level while aiming for the resistance level of 1.3469.
2) Sell positions, from our point of view, are also not convenient. There is neither a downward trend nor a signal about the end of an upward trend, and market participants are not particularly interested in the fundamental background. However, if the pair's quotes still settle below the 1.3292 level, then you can try to open short positions with targets in the range of 1.3257-1.3200 and keep them open until the MACD indicator turns up.
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.