Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair exclusively moved upward on the 30-minute timeframe on Monday. In principle, such a movement was logical after Friday's decline. However, unlike the euro/dollar pair, it turned out to be too strong. But it isn't really important as to how strong it turned out relative to Friday. The main thing is that one could work with the recoilless movement and make good money on it. Unfortunately, there weren't any signals on the 30-minute timeframe during the day. And in any case, there is no clear trend on this timeframe at this time, just as there is no trend line or channel. Therefore, in yesterday's article, we advised you not to trade for some time using the MACD indicator's signals. The technical picture on this timeframe did not change on Monday, and the trend line did not appear.
5M chart of the GBP/USD pair
There were five signals on the 5-minute timeframe today, four of which were, as they say, in the same direction. The first signal was formed at the very beginning of the European session, exactly when the upward movement began, which lasted for the entire day. The rebound from the 1.3802 level enabled novice traders to open long positions. The quotes of the pound/dollar pair rose by more than 100 points after this signal was formed. The second, third and fourth signals were also for buying, therefore, they could be worked out separately, it was possible to simply maintain a long position that was already open. In any case, beginners would make a good profit. The least would be 40 points. And even then, only if a long position was closed at the minimum Take Profit and new deals were no longer opened. If traders manually supported a long position, then it should not have been closed near 1.3865 or 1.3838. Simply because there was no rebound from these levels, which means there was no sell signal. Only the last fifth signal - to sell - a rebound from the level of 1.3928 could be worked out with a short position. Jerome Powell is set to speak in the US today, so you can manually close this deal. And even this transaction will bring minimal, albeit profit. Also, the ISM Manufacturing PMI was released in America today, which turned out to be worse than forecasted, but it only helped the euro and the pound rise during the day.
How to trade on Tuesday:
There is still no trend on the 30-minute timeframe. There is a swing. Therefore, it may be best not to consider any buy or sell signals from the MACD indicator for a while. Better to trade on the 5 minute timeframe. The levels: 1.3838, 1.3865, 1.3928, 1.3947 are still important. The price can bounce off them or surpass them. As before, we set Take Profit at a distance of 40-50 points. You can also use all the nearest levels as targets, but then you need to take the profit, taking into account the strength of the movement, so as not to close the deal too early. If the nearest level is too far, and the volatility is low, 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. There are no major publications or events scheduled in the UK or the US on Tuesday.
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.