Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair continued to trade in different directions on the 30-minute timeframe. If you look closely at the chart above, it becomes clear that the pair has executed this kind of movement for the last three trading days now. Formally, the upward trend is still in place, as the uptrend remains relevant. However, in the entire history of its existence, there have already been at least two false breakouts of its lower limit. And so, it is now more formal than relevant. Today, the pair's quotes have settled below the channel, but almost immediately resumed their upward movement. In yesterday's article, we advised you to consider buy signals from the MACD indicator. Today, there have been two such signals, both of which are circled in the chart. The first signal was formed before the European session opened, so it should have been skipped. The second signal was formed at around 1.3884 and should have been reached, since the indicator was not far from the zero level. In total, after forming this signal, the pair's quotes went up by around 38 points. That is, it is not enough for Take Profit to work. Also, the price failed to reach the nearest level of 1.3958. At that time, the 1.3913 level was still relevant, which we removed from the charts today, it was possible to take profit near it, then it would have reached 29 points. You can also close deals now. In any case, novice traders could get the minimum profit on this signal.
5M chart of the GBP/USD pair
Four signals were formed on the 5-minute timeframe, and all of them are rather complex and ambiguous. The first signal is a very imprecise rebound from the 1.3865 level. Formally, it could be worked out, but we recommended working only with the most accurate signals more than once. You could have made profit on a long position, but at about the same time a buy signal was formed on the 30-minute timeframe, so, in any case, long positions should have been opened here, which would have brought some profit. The second signal was formed near the 1.3913 level, but there was no clear rebound here either. Even if novice traders opened a short position here, then it should have closed in zero profit, since the price went down 20 points, therefore, Stop Loss should have been set. Then the price returned to the level of 1.3913 and settled above it, which was an outright false signal, according to which beginners could get 10-12 points of loss. The last, fourth signal should not have been worked out, since the 1.3913 level had already lost its relevance by that time. No important reports during the day, not a single interesting event in the UK and the US.
How to trade on Wednesday:
On Wednesday, we recommend trading according to the upward trend on the 30-minute timeframe. The pair continues to be within the rising channel, although it is rather formal. So, tomorrow you will have to wait for new buy signals in the form of upward reversals of the MACD indicator. The indicator is close to the zero level and can form potentially strong signals. The results of the Federal Reserve meeting will be summed up on Wednesday, and we also have Fed Chairman Jerome Powell's press conference. However, all these events will be late in the evening, and so there will be no important events during the daytime. Therefore, the macroeconomic background will have practically no effect on the pair's movement in the first half of the day. The important levels on the 5 minute timeframe are 1.3838, 1.3865, 1.3928 and 1.3947. The price can bounce off them or surpass them. As before, Take Profit is set at a distance of 40-50 points on the 30-minute timeframe, while the target on the 5-minute timeframe is the closest level (if it is located more than 20 points). If the nearest level is too far away, 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.
