Trading plan for GBP/USD on April 2. Simple tips for beginners

The GBP/USD pair showed a fairly decent downward movement on Monday. Unfortunately, it was not driven by the market's desire to sell, but rather by strong US ISM data. The market simply had no choice but to buy the dollar. Nevertheless, it's a good thing that the dollar rose, as market participants have previously ignored positive reports for the US dollar on multiple occasions. Therefore, although the price broke out of the descending channel once again, the downtrend persists. We mentioned last week that as long as the pair remains flat and moves sideways, any technical signals cannot be considered or executed. As we can see, the downward movement resumed on Monday. And in the last days of the week, the pair may continue to trade lower if the market finally exits the flat phase on the 24-hour timeframe, and also if the US reports turn out to be strong.

Two trading signals were generated on the 5-minute timeframe. The price dropped below the range of 1.2605-1.2611 at the beginning of the US trading session, indicating that short positions should be opened. By the end of the day, the level at 1.2541 was tested, from which the price bounced back. At this point, it was advisable to close the short positions. The profit amounted to about 50 pips.

On the hourly chart, the downtrend persists. Unfortunately, the market doesn't always trade in a logical manner, and on a global scale, the situation still resembles a flat. On Monday, the dollar strengthened as expected, but this does not mean it will always be the case. The movements are still quite chaotic, and it would be wise not to draw conclusions based on just one day after 4 months of a flat market.

On Tuesday, novice traders can use the level of 1.2541 as a reference point. At the moment, the pair has bounced from it, indicating that you may consider long positions in the morning (if the situation does not change). If the price breaches this mark, then you can open new short positions.

The key levels on the 5M chart are 1.2372-1.2387, 1.2457, 1.2502, 1.2544, 1.2605-1.2611, 1.2648, 1.2691, 1.2725, 1.2787-1.2791, 1.2848-1.2860, 1.2913, 1.2981-1.2993. No significant events scheduled in the UK. On Tuesday, we will highlight the US JOLTs report on job openings. This is not the most important indicator, but the market may still react to it. Volatility may decrease and the pair may start a corrective move.

1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.

4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, after which all open trades should be manually closed.

5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.

6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.

The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.

Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginners should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.