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On Thursday, the GBP/USD pair continued to trade with low volatility, mostly moving sideways. Currently, there are no significant movements in the market, as there are no macroeconomic reports or speeches from central bank representatives scheduled. Yesterday, the price dropped for the third time in recent days to the 1.2502 level but did not break below it. Therefore, today, we may observe a rebound and slight growth in the British currency.
On the 5-minute timeframe, two effective trading signals were generated on Thursday. Despite the pair being in a complete flat, it first tested the upper boundary of the horizontal channel and then the lower boundary. In both instances, the price bounced off quite accurately, allowing novice traders to open short positions followed by long positions.
In the first instance, the nearest target in the 1.2502–1.2508 range was reached, resulting in a profit of 20-25 pips. In the second instance, the price managed to rise only 20 pips upward; however, the buy signal remains intact as of now.
Thus, traders could have closed this position manually yesterday or today, or alternatively, moved the Stop Loss to breakeven and patiently awaited the next target at 1.2542 to be hit.
On the hourly timeframe, the GBP/USD pair has completed an upward correction. In the medium term, we expect the pound to decline, as we believe this is the most logical scenario. However, it's important to note that the British pound exhibits strong resistance against the US dollar. As a result, we anticipate a downward movement, but it's essential to base decisions on technical signals. The outcomes of the Bank of England and Federal Reserve meetings support the continuation of this downtrend.
On Friday, the GBP/USD pair may experience random trading patterns or remain flat with low volatility.
For trading on the 5-minute timeframe, the following levels are currently relevant: 1.2387, 1.2445, 1.2502–1.2508, 1.2547, 1.2633, 1.2680–1.2685, 1.2723, 1.2791–1.2798, 1.2848–1.2860, 1.2913, and 1.2980–1.2993. There are no significant events scheduled in the UK or the US on Friday that could impact trader sentiment or lead to active market movements.
Support and Resistance Levels: These are target levels for opening or closing positions and can also serve as points for placing Take Profit orders.
Red Lines: Channels or trendlines indicating the current trend and the preferred direction for trading.
MACD Indicator (14,22,3): A histogram and signal line used as a supplementary source of trading signals.
Important Events and Reports: Found in the economic calendar, these can heavily influence price movements. Exercise caution or exit the market during their release to avoid sharp reversals.
Forex trading beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are essential for long-term trading success.
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