How to trade GBP/USD on May 11. Simple trading tips and analysis for beginners

The GBP/USD pair tried to extend its weakest downward movement after overcoming another ascending trendline, but as soon as the US inflation report was released, it started to rise again, updating its last local high. By the end of the day, the pound's quotes returned to their original positions, but this does not change the essence of the matter. The price overcame another ascending trendline, the fifth in a row, and we still do not see a decline in quotes. This pattern has persisted for 2 months, if not more. Therefore, there is no logic in the movement now. While the euro has at least stopped rising groundlessly, it seems that this option is not available for the pound. There has not been a single report published in the UK this week, and it is unclear what bulls were so happy about when they learned about the 0.1% decrease in US inflation.

Thus, the pound remains overbought. Perhaps Thursday's Bank of England meeting will finally bring some logic to the pair's movements, but we shouldn't count on this. The central bank is likely to raise the key rate by another 0.25%, and bulls are currently using any excuse to open long positions.

The trading signals on the 5-minute chart were not the best. First, the pair bounced off the area of 1.2577-1.2597-1.2616 three times, around which trading is generally not recommended, since you could lose a lot more than you could ever gain, given that volatility is relatively low at this time. Therefore, only two signals near the 1.2659 level could be considered. The first buy signal should have been ignored because by that time the pair had already grown by 65 points for no reason. The likelihood of further growth was low. However, the sell signal could be worked out, and the price subsequently dropped to the 1.2616 level, where short positions should have been closed with a profit of about 20 points.

On the 30-minute chart, GBP/USD continues its upward movement in the medium-term or, at least, it doesn't trade lower, which is clearly visible on the 4-hour chart and higher ones. Most of the movements are illogical, as is the market reaction to fundamental and macroeconomic events. Overcoming the trendline gave the dollar absolutely nothing. Everyone's used to it. On the 5-minute chart, it is recommended to trade at the levels 1.2466-1.2477, 1.2507-1.2520, 1.2577-1.2597-1.2616, 1.2659-1.2674, 1.2697, 1.2772, 1.2860. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. On Thursday, the results of the Bank of England's meeting will be announced in the UK, which can undoubtedly be considered the "event of the week." There is no mention of BoE Governor Andrew Bailey's speech in the calendar, but there will be some final statement. This is an excellent opportunity for the pound to show new growth. In the US, only minor reports are scheduled for Thursday.

1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.

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

3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.

4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.

5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.

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 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, and 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 patterns (channels and trendlines).

Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.