Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair on Monday's 30-minute timeframe spent most of the day in an absolute flat and only started a more or less strong upward movement by the end of the day. In general, the upward trend remains for the pound/dollar pair. The MACD indicator generated two buy signals during the day, and now we will analyze them. The first buy signal was very weak. The price did not go up after it formed 20 points, so it was not even possible to set Stop Loss to breakeven. On the other hand, the pair did not settle below the level of 1.4081 either; nevertheless, the deal had to be closed at a loss on the MACD downward signal. The loss was only 4 points. Not scary. The second signal was also for a buy, but there is a nuance here. A long position should have been opened, but a similar buy signal on the 5-minute timeframe was formed half an hour earlier. Since there is no point in duplicating deals, novice traders should have ignored this signal on a 30-minute timeframe (although it is profitable).
The GBP/USD pair
5M chart of the GBP/USD pair
The pair formed two trading signals on the 5-minute timeframe, both for buying. Here the situation is the opposite of the one that emerged on the 30-minute timeframe. At the time of the formation of the first signal, a long position has already been opened on the basis of a signal on a higher TF. Thus, the second trade should not have been opened. On the second signal - a clear rebound from the level of 1.4081 - a long position should have been opened, which was eventually confirmed by a buy signal from the 30-minute timeframe, afterwards the pair went up (at the moment) 48 points, which would have been enough to trigger Take Profit equal to 40 points. Take Profit at 50 points would have probably worked in the next hour, but if novice traders have not yet closed this deal, we recommend doing it manually. In general, the pair resumed its upward movement and is fully adhering to the upward trend. No important macroeconomic report during the day, nor was there any important news.
Trading tips for Tuesday:
At this time, an upward trend is maintained on the 30-minute timeframe, supported by an upward trend line. Thus, it is recommended to continue to consider long positions and look for buy signals at this TF. The MACD indicator is now far enough away from the zero level, so now you need to wait for a downward correction for the indicator to discharge. The important levels on the 5 minute timeframe are 1.4081, 1.4157 and 1.4181. The price can bounce off them or overcome them. As before, we set Take Profit at a distance of 40-50 points for signals with 30M TF. At the 5M TF, you can use all the closest levels as targets, but then you need to take profits, taking into account the strength of the movement, so as not to close the deal too early. When passing 20 points in the right direction, we recommend setting Stop Loss to breakeven. You should pay attention to the UK unemployment report on Tuesday. In theory, it can affect the movement of the pound/dollar pair. However, unemployment is an indicator that rarely surprises. We also recommend paying attention to the report on the change in the number of applications for unemployment benefits. In case of a strong deviation from the forecast, the pair may react with a strong movement or a sharp reversal. In addition, Bank of England Governor Andrew Bailey will make a speech, who theoretically can also tell the markets something interesting.
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.
