Stay 
Trading Conditions
Products
Tools
The GBP/USD pair experienced a recovery on Friday after a sharp decline on Thursday. This increase in the value of the British currency was primarily technical, as these technical factors outweighed the macroeconomic backdrop for market participants. For the first time in two weeks, an important report was published on Friday, which again prompted the market to consider buying the US dollar. The ISM Manufacturing PMI in the US came in better than expected. Typically, a better-than-forecast reading serves as a reason to purchase the dollar. However, there was no significant movement towards buying the dollar, and the market reaction was muted. This does not necessarily indicate that the decline of the pound has come to an end. As the new week begins, the pound may continue to experience an upward correction, but all signs suggest that the sterling is likely to persist in its prolonged decline. We have cautioned about this possibility multiple times.
In the 5-minute time frame, four buy signals generated near the 1.2387 level on Friday. The price rebounded from this level four times, with each signal effectively mirroring the previous one. Consequently, novice traders could have opened only one buy trade, which ultimately turned out to be profitable. The total upward movement from the 1.2387 level was 30 pips.
On the hourly time frame, the GBP/USD pair has recently exited the holiday flat phase and resumed its primary trend. In the medium term, we fully anticipate a decline in the pound, as we believe this is the only logical outcome. Therefore, further declines should be expected; however, trading decisions should always be based on technical signals. The results of the Bank of England and Federal Reserve meetings reinforce the likelihood of continued downward movement.
On Monday, the GBP/USD pair may continue to correct following Thursday's drop. However, new signals will be necessary to open fresh positions.
On the 5-minute time frame, the following levels can be considered for trading: 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.
Additionally, on Monday, both the UK and the US will release their second estimates of services PMI data, which are considered secondary reports. These data releases may provoke minimal market reaction, but nothing more significant is expected.
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.
InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.
