How to trade GBP/USD on May 29. Simple trading tips and analysis for beginners

On Friday, the GBP/USD pair moved in exactly the same way as the EUR/USD pair. The pound traded higher in the first half of the day, an attempt to correct against the current downtrend. It fell during the second half of the day after the release of US macro data and eventually returned to its initial positions closer to the evening. The only addition was the UK retail sales data, which was published early in the morning and turned out to be stronger than forecasts. This could have provided an additional boost to the bulls, explaining the pound's growth. However, later on, US data were released, which can be considered neutral overall. The most important report on durable goods orders surprised traders as it turned out to be 2.2% above forecasts, resulting in the dollar's growth. But overall, Friday's movements did not have any impact on the overall technical picture. Although there is currently no trend line, the downtrend is unquestionable.

Two trading signals were formed on the 5-minute chart, and both left much to be desired. First, the pair fell below the range of 1.2351-1.2367, and then it climbed above it. Beginners were lucky that the volatility on Friday was slightly higher than in the previous days of the week, so in both cases, the price managed to move 20 pips in the right direction, which was enough to set the Stop Loss at breakeven. Consequently, both trades should have closed at breakeven without losses. Take note that the pair's movements are currently weak and movement comes with frequent pullbacks and corrections. Trading in such conditions can be quite challenging.

As seen on the 30M chart, the GBP/USD pair tried to break the downtrend, but failed. The British pound is currently falling under any circumstances, which fully aligns with our view of the situation. The pair rose for two months for no clear reasons, and now it is time for a reversal, which also doesn't require significant justifications. The key levels on the 5M chart are 1.2171-1.2179, 1.2245-1.2260, 1.2351-1.2367, 1.2420, 1.2470, 1.2507-1.2520, 1.2597-1.2616. When the price moves 20 pips in the right direction after opening a trade, a stop loss can be set at breakeven. There are no important events or reports scheduled for Monday in the UK or the US. We can expect the day to be absolutely dull unless we receive some discouraging news. Volatility will probably be low, and there may be no intraday trend.

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.

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.