How to trade GBP/USD on August 5? Simple tips for beginners.

The GBP/USD pair gravitated towards growth in the first half of Thursday, and in the second half it collapsed. We have warned in our latest articles that despite a very likely increase in the Bank of England's key rate, the pound has most likely worked through this tightening of monetary policy. Therefore, after the meeting, we expected the pound to fall. And so it happened. The British currency fell within an hour by 140 points, which, by the way, is still very good for it, because it continues to remain close to its local highs. The price settled below the ascending trend line on Wednesday, but resuming the upward trend from the current levels is not an impossible task if the US statistics turn out to be disappointing on Friday. Let's return to the BoE meeting. The rate was raised by 0.5%, and the bank itself announced its readiness to start selling bonds from its balance sheet, which it had accumulated over many years under various economic stimulus programs. Both of these solutions are hawkish. However, there were also several drawbacks. They are expressed by the forecasts voiced by BoE Governor Andrew Bailey. According to him, inflation in the UK will continue to grow despite six increases in the key rate, the economy will face a recession at the end of 2022, and it may take at least two years for inflation to return to the target level. Therefore, there is little good in the British economy now, but these words give hope that the central bank will continue to raise the rate. And this is already very good for the pound.

The moves on the 5-minute timeframe were strong on Thursday and the reversals were sharp. The first sell signal was formed near the 1.2186-1.2205 area and was almost perfect in terms of accuracy. Unfortunately, it was at this time that the results of the BoE meeting were announced, so newcomers could hardly have had time to open short positions. Yes, and you shouldn't have done this, since the pair could "fly away" in any direction. The next sell signal near the level of 1.2106 should also be ignored, as it was formed 15-20 minutes after the announcement of the results of the meeting. But the last signal to buy near the level of 1.2062 could be worked out with an error of three points. It was unlikely to earn much on it, since the price very quickly returned to the level of 1.2106 and began to "dance" around it. Therefore, it was necessary to exit long positions here, and ignore all subsequent signals, since they were formed too late in time. As a result, the day could have ended with a profit of about 10-15 points.

The pound/dollar pair has overcome the trend line on the 30-minute TF, so the upward trend has been canceled. We now expect another serious fall in the pound, but much will depend on the market's final reaction to the BoE meeting. We said that it can be observed for at least a day. Also, a lot depends on Friday's US Nonfarms report. After that it will be possible to draw conclusions. On the 5-minute TF on Friday it is recommended to trade at the levels of 1.1967, 1.2033, 1.2062, 1.2106, 1.2186, 1.2205, 1.2245-1.2260. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. The US is set to publish reports on unemployment, labor market and wages. They can provoke a strong market reaction.

1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.

2) If two or more deals were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.

3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.

4) Trade deals are opened in the time period between the beginning of the European session and until the middle of the US one, when all deals must be closed manually.

5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance.

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 indicator (14,22,3) 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.