Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair once again traded in an unappealing way on the 30-minute timeframe on Wednesday. If yesterday, the UK and the US published quite important reports that led to an increase in volatility, then today, on the contrary, volatility has decreased as there was nothing interesting. There was only Federal Reserve Chairman Jerome Powell's speech in the US, which began a couple of hours ago. Someone might say that the euro began to grow at around this time and broke out of the horizontal channel, which could have been provoked by Powell's speech. However, the pound has not changed its dynamics in recent hours, so we are inclined to believe that Powell's speech has nothing to do with it. Since earlier the pound/dollar pair crossed the rising trend line, today novice traders were advised to consider sell signals. The first one was formed in the middle of the day, but the MACD indicator rose too high, so this signal should be ignored. A little later, a rising channel formed and long positions became relevant again, and the trend for the pair became upward again. Thus, the very next buy signal could be worked out, especially since it had just formed right near the zero level. At the moment, you could make around 18 points of profit with a long position on this signal, which is quite good for today.
5M chart of the GBP/USD pair
Three trading signals were formed during the day on the 5-minute timeframe. They are all encircled. Unfortunately, among them there was not a really strong one who could bring good profits. It all started with a buy signal in the morning, after the pair surpassed the 1.3773 level from the bottom up. After the formation of this signal to the upside, the price moved only 28 points. Having failed to reach the 1.3811 level, around which it would have been possible to take profit, the pair turned down, so this deal, most likely, closed in zero profit at Stop Loss. Then the pair settled below the 1.3773 level, which was also a signal to sell. This time, the price moved even less in the desired direction, only 10 points, so this trade brought a loss aworth around 18 points. The third and last signal was formed at the same level (1.3773), and then bounced off it. And so it was the third time to open a deal on such a signal, given the fact that the two previous ones did not bring profit, which should not have been. But even if novice traders have opened new long positions, it's just a bit of profit, a few points. Therefore, it was possible to make a profit today, but only a very small one.
How to trade on Thursday:
On Thursday, we recommend trading according to the existing upward trend on the 30-minute timeframe, which is now supported by the upward channel. So tomorrow it will be necessary to wait for new buy signals in the form of a price rebound from the lower border of the channel or upward reversals of the MACD indicator. The MACD indicator needs to be discharged to the zero level. No important events planned in Great Britain. Meanwhile in America, there will be several more or less significant reports on industrial production, retail sales and claims for unemployment benefits. We advise you to pay attention to them. The important levels on the 5 minute timeframe are 1.3725, 1.3773 and 1.3811. The price can bounce off them or overcome them. As before, Take Profit is set at a distance of 40-50 points on a 30-minute timeframe, while the target on the 5-minute timeframe is the nearest level. If the nearest level is far, then you are advised 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.