Hourly chart of the GBP/USD pair
The GBP/USD pair spent Thursday in the same horizontal channel, which we have already discussed in previous articles. Most of the trading now takes place between the levels of 1.3800 and 1.4000. The 1.3862 level is also of great importance. There is no pronounced trend movement now, no trend line, no channel. Thus, there is no trend for the pound/dollar pair either. Hence the conclusion: it is best to trade at important and strong levels at the moment, counting on rebounds from them or surpassing them. Signals from the MACD indicator can also be used, but now it is extremely difficult to understand which of them are false and which are not. By and large, a signal appeared during the day that really deserved attention. The MACD indicator changed its direction of movement several times, however, we rejected all buy signals by default, since the price was located in the upper area of the horizontal channel, and the MACD indicator itself was at its highest levels. For the same reason, there was no point in considering sell signals - the indicator was too high and could start discharging at any moment, showing uncorrelation with the price. But an ideal rebound from the 1.3999 level in terms of accuracy could and should have been worked out. First, it was indeed a rebound - the bulls did not even try to get the pair to settle above this level. Secondly, the price spent only ten minutes near it, which can be seen in the chart below. As a result, novice traders could open short positions and Take Profit by around 40-50 points. Basically, 40 points of the pair went down immediately, literally within half an hour. This was followed by an upward pullback, followed by a new, stronger downward spiral. As a result, the pair moved down about 80 points, so beginners could make good money on this signal. All fundamental and macroeconomic events of the day, including the results of the Bank of England meeting, did not have any impact on the pair's movement.
On the 5-minute timeframe, you can clearly see that the price worked out perfectly and rebounded off the 1.3999 level. Thus, this chart detailed when the price approached an important level and formed a sell signal in time. As mentioned above, all the fundamental events of the day did not have any impact. Although novice traders were required to follow the results of the Bank of England meeting. They could also pay attention to Federal Reserve Chairman Jerome Powell's speech, or at least be more attentive during these events.
No major events or publications in either the UK or the US on Friday. Thus, in the course of tomorrow, trading decisions will have to be made only on the basis of technical signals. However, this is for the best. If there are no surprises, then the movement should be calm. Unfortunately, there is no trend for the pair now, so it will be extremely difficult to filter out all the signals of the MACD indicator. Do not open deals for every MACD reversal! Thus, we advise you to trade from important levels that are present in the chart - 1.3999, 1.3862 and 1.3778. Rebounding or surpassing these levels will allow you to open the corresponding positions. In case of a doubtful situation, we turn to the 5-minute timeframe for an explanation. When moving in the right direction after opening a trade of 15-20 points, 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.