Trading plan for GBP/USD on April 4. Simple tips for beginners

The GBP/USD pair continued to trade higher on Wednesday, although it had a few reasons to support the rise. Earlier last week, the pair left the descending channel, but the market was in a flat state at that time. This week, the pound traded higher again, which shows that the short-term downtrend is likely over. However, we already warned you that there is a flat phase between the levels of 1.25 and 1.28 on the 24-hour timeframe. So what happened? The price approached the lower boundary of this channel and started an upward reversal simply because the pair is facing a flat at the moment, and the fundamental and macroeconomic background is simply being ignored. Therefore, in the near future, the pound may start a new wave of growth, and it could possibly climb up to the level of 1.2800. We don't expect this week's reports on the US labor market and unemployment to change the situation, as the market is still not ready to sell below the level of 1.2500.

In the 5-minute timeframe, the first signal was formed during the US trading session when the price consolidated above the range of 1.2605-1.2611. Afterward, the price continued to rise and reached the level of 1.2648 by the end of the day, where long positions should have been closed. Traders could earn approximately 30 pips.

On the hourly chart, the GBP/USD pair will likely start a new upswing while the flat phase remains intact. Unfortunately, the market doesn't always trade in a logical manner, and on a global scale, the flat persists. Therefore, in the coming weeks, we can expect the pair to rise towards the 1.2800 level. However, it's still showing erratic movements with hardly any logic behind them.

On Thursday, novice traders may use the level of 1.2648 as a reference point. You may consider new long positions since the price has surpassed this mark. If it goes the other way around, you may open short positions while aiming for 1.2605-1.2611.

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. On Thursday, the UK will release the second estimate of its Services PMI data. Meanwhile, the US will release a minor report on initial jobless claims, which rarely triggers a market reaction.

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.