Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair on the 30-minute timeframe was trading in such an unappealing way on Tuesday. By and large, the pair spent the last three days in a horizontal channel, limited by the levels of 1.3672 and 1.3773, regularly bouncing from the upper border, then from the lower one. Today, the pair was unable to work out either the one or the other border, but at the same time remained inside the horizontal channel. Throughout the day, the quotes were constantly changing the direction of movement. In the first half of the day, such dynamics was due to the British macroeconomic reports, and in the afternoon - the US inflation report. This is not to say that the UK data was impressive. Rather, they were neutral and slightly in favor of the British pound. GDP could turn out to be much worse than it turned out in the end, since there were two lockdowns during the winter in Great Britain. And industrial production, on the contrary, even increased in February and exceeded the forecasted values. Thus, the pound was rising in the morning and this growth was reasonable. And along with this growth, a buy signal was formed in the form of a rebound from the 1.3724 level. The signal turned out to be strong, but, unfortunately, wherever a long position was opened, the price still did not reach the nearest resistance level of 1.3773 and did not go up at least 40 points, which would have been enough to trigger Take Profit. Thus, the long position was closed by Stop Loss at breakeven. The second signal was generated by the MACD indicator to sell. It was formed a few hours before the US inflation report was released, so it could be worked out. The most paradoxical thing is that this signal brought profit to novice traders. First, the price went down 20 points, which was enough to set Stop Loss to breakeven, and just before the report was released, the deal had to be closed manually, which would have brought a profit of about 15 points.
5M chart of the GBP/USD pair
Three trading signals were formed during the day on the 5-minute timeframe. Early in the morning, with the opening of the European session, the price bounced from the 1.3725 level and went up 36 points. This was not enough for Take Profit = 40 points, and the 1.3773 target level was also not reached. Therefore, novice traders could close this deal manually, but, according to our recommendations, this deal should have been closed by Stop Loss at breakeven. The next sell signal was formed just before the US session opened and before the inflation report was released. Naturally, it should have been skipped. The last third signal was formed after the markets calmed down following the inflation report. There was a clear rebound from the same level of 1.3725. Therefore, it was possible to open a long position again. At the moment, it can be closed manually at a profit of about 13 points. Thus, today novice traders could have earned a total of about 28 points.
How to trade on Wednesday:
On Wednesday, we recommend trading according to the formal downward trend available on the 30-minute timeframe, as well as the 1.3672-1.3773 horizontal channel. Therefore, you should wait for new sell signals tomorrow. For this, the MACD indicator will not even need to discharge, since it is already near the zero level. No important or interesting event planned for April 14 in Britain, meanwhile Federal Reserve Chairman Jerome Powell will deliver a speech in America. We advise you to pay attention to this event. The important levels on the 5 minute timeframe are 1.3672, 1.3693, 1.3725 and 1.3766. The price can rebound off them or surpass them. As before, we set Take Profit at a distance of 40-50 points on a 30-minute timeframe, while the nearest level is the target on the 5-minute timeframe. If the nearest level is far, then it is recommended to maintain the deal in manual mode, tracking changes in the market. When passing 20 points in the right direction, we recommend setting Stop Loss to breakeven.
On the chart:
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.
Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.
The MACD indicator 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 announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.
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.
