Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair once again failed to overcome the important level of 1.3598 on Monday, from which it also rebounded earlier last week. Thus, we have as many as two point bounces from the 36th level, as well as breaking the upward trend line. Therefore, the chances of a new downward trend forming are now extremely high. We believe that after a slight upward pullback, the British currency will resume to fall. Also remember that the British pound has risen in price almost without recoil over the past three weeks, two of which were during the holidays. Thus, the downward correction is really overdue. There were no important macroeconomic statistics or fundamental events on Monday, so novice traders had to react only to technical signals.
5M chart of the GBP/USD pair
The movement of the pound/dollar pair looks rather complicated on the 5-minute timeframe. The problem is the same as for the EUR/USD pair: in the first half of the day the price was in a flat, so all trading signals at that time turned out to be false. Or almost everything. More or less strong movement began only in the US trading session. However, we will deal with trading signals in order. Basically, during the European trading session, four identical buy signals were created in the form of rebounds from the level of 1.3579. Therefore, beginners should have worked only the first of them, and the rest should not be duplicated, since there was no point in this. The most that the pair could go up after all the bounces was 15 points, so the Stop Loss worked at breakeven, when the price once again returned to the level of 1.3579. A sell signal, which was formed at the beginning of the US session near the same level of 1.3579, turned out to be more successful. After its formation, the pair managed to go down 38 points, so only a little bit was not enough to trigger Take Profit. However, the trade could have been manually closed when the price settled above the 1.3549 level, which has lost its relevance after today's trading. As a result, we managed to earn about 15 points on a short position. Little, but better than nothing.
How to trade on Tuesday:
The upward trend is canceled at the 30 minute TF as the price has broken the new uptrend line. Therefore, we expect a downward movement from the pair this week. We can count on the pound's growth if the price settles above the level of 1.3598. On tomorrow's 5-minute TF, it is recommended to trade at the levels of 1.3488, 1.3521, 1.3579, 1.3603, 1.3638. The price can rebound from these levels, or it can overcome them. As before, we set Take Profit at a distance of 40-50 points. At the 5M TF, you can use all the nearest levels as targets, but then you need to take profit, taking into account the strength of the movement. When passing 20 points in the right direction, we recommend setting Stop Loss to breakeven. No major report will be published in the UK tomorrow, no major event scheduled. Thus, on Tuesday, newcomers will be able to turn their attention only to Jerome Powell's speech in the US Congress.
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.
The MACD indicator (14,22,3) 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 speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, 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 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.
