Analysis of previous deals:
30M chart of the GBP/USD pair
The GBP/USD pair fell by 100 points on the 30-minute timeframe. However, in the second half of the day, growth followed, as the report on retail trade in the United States disappointed market participants. Nevertheless, in general, the downward trend continues, although it is very weak. At this time, it is not even possible to build a convincing descending channel or trend line, which still complicates the process of trading on a 30-minute timeframe. Also, the markets continue to ignore macroeconomic statistics quite often. For example, this morning in the UK, quite important reports were published on unemployment, applications for unemployment benefits, as well as on wages. All of them were stronger than the forecasts, but the pound did not start to rise in price after their publication.
5M chart of the GBP/USD pair
The picture of the pair's movement is very interesting on the 5-minute timeframe. And the main thing is that it has allowed beginners to trade quite productively today. We have already said that the British statistics were ignored by the markets, although, in theory, it should have provoked the growth of the British currency. However, it didn't provoke me. The first sell signal was formed today just around the time when statistics began to be published in the UK. However, just after 20 minutes, it became clear that a new growth of the British currency would not happen, so with some delay, but a sell signal in the form of a rebound from the level of 1.4124 could be worked out. As it turned out later, it was absolutely the right decision, as the price eventually went down about 90 points. Thus, any set Take Profit on the pound/dollar pair (from 40 to 50 points) worked. Near the level of 1.4081, a sell signal was also formed, but at that time short positions were already opened, so new deals should not be opened. You just had to wait for the Take Profit to work on an already open trade. The level of 1.4033 was not on the chart today. This level is the minimum of today and will participate in tomorrow's trading. Subsequently, the quotes returned to the level of 1.4081, but they could not form a strong signal around it, so they should not have opened new deals. In general, today was very successful for novice traders.
Trading tips for Wednesday:
At the moment, on the 30-minute timeframe, the pound/dollar pair is trying to form a new downward trend, but it remains very weak. Therefore, we still recommend not to track the signals from the MACD indicator until a trend movement of normal strength and with a trend line or channel begins. On the 5-minute timeframe, the important levels are 1.4006, 1.4033, 1.4081 and 1.4124. We recommend trading on them. From them, the price can rebound or overcome them. As before, Take Profit is set at a distance of 40-50 points. On the 5M TF, you can use all the nearest levels as targets, but then you need to fix the profit, taking into account the strength of the movement. If you pass 20 points in the right direction, we recommend setting the Stop Loss to breakeven. On Wednesday in the UK, the publication of the consumer price index for May is scheduled for the morning, and this report can quite seriously affect the market mood and cause their reaction. In the future, there will be no statistics or other events until the evening. And in the evening, the results of the Fed meeting will be summed up, which may also cause a strong reaction from traders. But by then, newcomers can safely leave the market.
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.
The material has been provided by InstaForex Company - www.instaforex.com