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The GBP/USD pair also traded very poorly on Thursday. The technical picture is now complicated by the fact that the pair is in a limited range. There can be a lot of levels at which trading is carried out, and they will be located very close to each other. Therefore, you have to balance between having a small number of levels and constantly adjusting them. In principle, the chart above clearly shows that the pair has spent the last four trading days between the levels of 1.2169 and 1.2325. It seems to be a very wide channel for a flat, but flats are also different. And the trend is now completely absent. Macroeconomic statistics from the UK were also available, but it was not as disastrous as in the US or the EU. Therefore, to see the British pound's collapse in the morning, which lost almost 100 points within two hours, was very strange. But, as we have already said, there is not much logic on the market now. Indices of business activity in Britain were at the level of May, only the manufacturing sector fell slightly. Thus, the British currency had a formal reason to fall, but only a formal one. And the pound started to sharply rise in the afternoon, and it began long before the release of US statistics. Therefore, again, it is impossible to talk about a logical movement now.
Trading signals on the 5-minute timeframe again left much to be desired. The first sell signal near the 1.2260 level was good, but unfortunately the price failed to get only 5 points to the 1.2164 level to take profit on this trade. As a result, the short position closed in profit of about 20 points, when the price settled above the level of 1.2216. At the same moment, a long position should have been opened, which had to be closed near the level of 1.2260, since at that time reports on business activity in the US were published. And after their release, "songs and dances" began around the level of 1.2260, so it was no longer worth entering the market. As a result, we managed to get profit on two deals, but it most likely went to cover losses on deals on the euro/dollar pair. It wasn't the best day.
The upward trend formally remains on the 30-minute timeframe, but the pair has been moving only sideways for four days now. Therefore, now, in principle, it is very difficult to characterize this movement in one word. We advise beginners to be careful and cautious in the near future, because the chaotic movement may take longer than expected. On the 5-minute TF, it is recommended to trade at the levels 1.2106, 1.2170, 1.2216, 1.2260, 1.2329-1.2337, 1.2371, 1.2471-1.2477. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. The release of retail sales is scheduled for Friday in the UK, and the consumer sentiment indicator from the University of Michigan is set for the US. Since the market is now reacting very strangely, we should expect a reaction to any of these reports, and hardly a logical one at that.
1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.
2) If two or more deals were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.
3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.
4) Trade deals are opened in the time period between the beginning of the European session and until the middle of the American one, when all deals must be closed manually.
5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.
6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance.
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 (14,22,3) 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.
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