Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair was trading in a mirror-like way in relation to yesterday on the 30-minute timeframe. If yesterday, the quotes of the pair rose by 100 points, then today they fell by exactly the same amount. Moreover, both yesterday and today, there were no important macroeconomic reports in the UK, as well as in the US. Thus, it is rather difficult to say what these non-weak movements were associated with. However, for the pound, 100 points a day is not much. Average volatility. Therefore, in principle, nothing extraordinary happened, and good fundamental reasons are not too necessary for movements of this scale. Now let's look at signals. The first buy signal was generated by the MACD indicator early in the morning, even before the European trading session opened. It's called a "borderline". Firstly, it was formally formed at night, secondly, the MACD indicator did not approach the zero level, and thirdly, the nearest target, from which the price had already rebounded off twice (1.3913), was only 13 points. In general, the signal is 50/50. In any case, bulls failed to surpass 1.3913 even on its third attempt, therefore, even if novice traders opened a long position, it should have been closed with a slight loss on the rebound from the 1.3913 level. But a rebound from the level of 1.3913 itself is also a sell signal. And, it turns out that two of them were formed during Tuesday. Moreover, one was in the evening, we do not consider it, and the second - in the morning, after the 1.3913 level withstood the onslaught of the bulls twice. We did not mention this level in yesterday's article, since the peak of the day had not yet been formed at the time when the last article was written. However, it appeared later on and a strong sell signal emerged near it. As a result, according to this signal, traders could open short positions and Take Profit would allow them to earn at least 40 points. As a result, the 1.3811 level has been reached which is the previous day's low.
5M chart of the GBP/USD pair
We could clearly see that the pair bounced from the 1.3913 level on the 5-minute timeframe for the last time during the very beginning of the European session, then it surpassed 1.3851 and 1.3845, moreover, several times, making them more irrelevant at the end of the trading session. And so it reached the 1.3811 level. There were no clear and precise signals around 1.3851 and 1.3845, but in any case, at that moment, positions were already opened on the 30-minute timeframe. In this way. Duplicating them was clearly not worth it. No important reports from the US or the UK during the day. Therefore, nothing prevented novice traders from trading on pure technique.
How to trade on Wednesday:
On Wednesday, we recommend trading again according to the upward trend on the 30-minute timeframe. Therefore, tomorrow you will need to wait for new buy signals. The MACD indicator is now very low and cannot form a clear signal. Therefore, we are considering possible price rebounds from the level of 1.3811 or an upward trend line. Several interesting events are scheduled for April 7th in Britain and the United States. For example, the publication of the Federal Reserve minutes or the index of business activity in the service sector in Britain. However, we believe that neither this nor that event will be worked out. The important levels on the 5 minute timeframe are 1.3865, 1.3811 and 1.3750. The price can bounce off them or surpass them. As before, we set Take Profit at a distance of 40-50 points on the 30-minute timeframe, while the target is the nearest level on the 5-minute timeframe. If the nearest level is far away, then you should 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.
