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Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair spent the last trading day of the week in the same flat as the EUR/USD pair. The markets managed to reach the 1.3845 level on the 30-minute timeframe, which is the previous local high. It was not possible to surpass this level, but in general the upward trend remains, in contrast to the EUR/USD pair. The pair also experienced an absolute flat for most of the trading day. Thus, traders of the pound/dollar pair also ignored important and strong reports from America, which should have caused the pair to fall to the trend line. Two signals were generated during the day. Firstly, this is a rebound from the 1.3845 level, and secondly, an upward reversal of the MACD indicator after the minor correction. In the first case, it was possible to open short positions with a Take Profit of 40-50 points, in the second case, the same - long positions. The truth is it was not possible to gain profit either in this or that case, since volatility was low on Friday and it reached the same 40 points just like the euro. In the first case, the deal should have been closed by Stop Loss at breakeven, which should have been set, according to our recommendations, after a 20 point downward movement. In the second case, the price did not have time to rise by 20 points, and the deal can be opened up to the present moment, being in zero profit. Although we usually recommend closing any positions or not opening new ones before the market closes on Friday. In any case, there were no losses, as well as profits. It was difficult to achieve both the first and the second with such volatility.
5M chart of the GBP/USD pair
Things look even more boring on the 5-minute timeframe. One gets the impression that the euro/dollar and pound/dollar pairs traded exactly the same on April 2. Actually, it was so. During the day, novice traders could consider opening deals at only one point. At a rebound from the 1.3845 level, which is the previous local high, and which we have already mentioned above. It was even possible to make a profit on this signal on the 5-minute timeframe, since the quote nearly reached the nearest support level at 1.3810. The quotes previously fell short by just a point. However, in reality, it was necessary to close any positions before such an important report like the Nonfarm Payrolls was released, since the market and the pair could sharply react to such a report. But In practice, this did not happen, and novice traders could get 10 points of profit. No more signals were generated, and the pair was trading in a narrow horizontal channel until the end of the day. There were no important publications or events in Great Britain that day.
How to trade on Monday:
On Monday, we recommend trading again according to the upward trend on the 30-minute timeframe. A rebound from the level of 1.3845 occurred, but was already blocked by a buy signal from MACD, which should have also been closed on Friday. Therefore, you need to wait for new signals to appear on Monday. Either a clear rebound from the 1.3845 level, or if the quote clearly surpasses this level, or when a new reversal of the MACD indicator to the upside occurs. No reports from Britain on Monday, while the US ISM index will be released, to which, in theory, traders should answer, but no one knows what will happen in practice following Friday's silence. On the 5-minute timeframe, the important levels are still: 1.3845, 1.3851 and 1.3810. The price can bounce off them or surpass them. As before, Take Profit is set at a distance of 40-50 points on a 30-minute timeframe, while the target is the nearest level on the 5-minute timeframe. If the nearest level is far away, then you are advised to maintain the deal in manual mode, tracking changes in the market. We recommend setting Stop Loss to breakeven when passing 20 points in the right direction.
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.
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