Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair traded quite actively on the 30-minute timeframe on Wednesday. At least it seems so at first glance. However, we draw the attention of novice traders to the fact that the pound/dollar pair passed from the low to the high of the day by only 60 points. For the pound, this value is approximately the same as for the euro/dollar pair, the value of 30 points. Thus, volatility was very low today. Nevertheless, the downward trend continues for the pound/dollar pair. True, it may persist for a very short time, since the Federal Reserve will sum up the results of its meeting, and tomorrow the Bank of England will announce its decisions at its meeting. Thus, a very funny day awaits the pair, during which quotes can "fly" from side to side, often changing the direction of movement. We also expect increased volatility. In principle, there is nothing special to say today. Not a single macroeconomic report has been released in the EU, the UK or the US today. One trading signal was generated to sell when rebounding from the level of 1.3677, but it was formed at night, so it did not work out.
5M chart of the GBP/USD pair
The pair's movement on the 5-minute timeframe was, to put it mildly, not the best. It changed the direction of movement several times, alternating trend sections with flat. Several signals were generated, but they did not bring profit to traders. Unfortunately, the markets are blatantly nervous on the eve of two important central bank meetings. For the euro/dollar pair, these nerves are expressed in a complete flat, for the pound/dollar pair it was in non-tradable movements. Nevertheless, let's try to figure out how you should trade today. The first signal - to sell - was formed in the middle of the European session. The pair overcame the level of 1.3939, but could not continue to move down. The signal to call this "strong" language does not turn. It took at least an hour to form it. Therefore, it could be safely ignored, given the circumstances. However, it was not without strong signals. The second buy signal (we do not consider the night signal) was strong, but the price could not continue moving in the right direction here either. When the quotes dropped below the level of 1.3639, the long position should have been closed at a loss of 15 points. All subsequent signals were also formed around the 1.3639 level. Therefore, they should have been ignored, since by that time at least two (or even three!) Signals near this level had turned out to be false.
How to trade on Thursday:
At one point, the pound/dollar pair maintained a downward trend on the 30-minute timeframe, but there is an assumption that it will be broken today or tomorrow. Thus, we advise novice traders to wait for the results of both central bank meetings and only then carry out a new analysis with new data. If a strong signal is formed, you can open positions, but you definitely need a Stop Loss. The important levels on the 5-minute timeframe are 1.3590, 1.3639, 1.3677, 1.3692, 1.3729, 1.3764, 1.3796. We recommend trading with them. The price can bounce off them or 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. The UK and the US are scheduled to publish reports on business activity in the service and manufacturing sectors. But this data will be in the shadow of the results of the Fed meeting (today) and the results of the meeting of the Bank of England (tomorrow). Therefore, all focus is on these two events.
We also recommend that you familiarize yourself with the EUR/USD review.
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 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.
