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The GBP/USD pair showed minimal trading activity on Tuesday. During the day, only one event could have influenced the pair's movement, but it didn't. The JOLTs report on U.S. job openings in October exceeded forecasts, which could have strengthened the U.S. dollar. However, the market ignored this data.
As a result, GBP/USD remains in a weak upward correction (unlike EUR/USD) and may continue this trend for some time. Today, a parade of significant events begins in the U.S., which could lead to increased volatility. The pair's direction will entirely depend on the nature of the data released through the end of the week. In the medium term, we still anticipate a decline in the British currency, although it may continue to correct in the short term.
Two very inaccurate sell signals were formed on Tuesday in the 5-minute timeframe. The previously reliable trading area was ignored by the market yesterday. It seemed as though major players deliberately drove the price higher to trigger retail traders' Stop-Loss orders. In any case, profiting from these signals was unlikely.
Additionally, although the JOLTs report was expected to boost the dollar, the U.S. currency fell rather than rose in the second half of the day, which was equally puzzling. Overall, it was an unpredictable trading day.
On the hourly timeframe, the GBP/USD pair remains inclined toward decline. In the medium term, we fully support the notion of a falling pound, as we consider it the only logical scenario. The pound continues to correct, and this process may take some time. However, it's essential to remember that the current rise in the British currency is driven purely by technical factors.
On Wednesday, novice traders can anticipate a renewed decline in the British pound, given that the 1.2680–1.2685 zone was not breached and the pair showed unusual growth yesterday.
On the 5-minute TF it is now possible to trade at 1.2387, 1.2445, 1.2502-1.2508, 1.2547, 1.2633, 1.2680-1.2685, 1.2754, 1.2791-1.2798, 1.2848-1.2860, 1.2913, 1.2980-1.2993. Andrew Bailey, Governor of the Bank of England, will deliver a speech in the UK. Jerome Powell, Chair of the Federal Reserve, will also speak in the U.S. Pay attention to the ISM Services PMI report from the U.S., which could drive significant market movements.
Support and Resistance Levels: Target levels for opening or closing positions. Take Profit orders can also be set here.
Red Lines: Channels or trendlines that show the current trend and the preferred trading direction.
MACD Indicator (14,22,3): A histogram and signal line that serve as supplementary trading signals.
Important Events and Reports: Found in the economic calendar, these can strongly influence price movements. During their release, trade cautiously or exit the market to avoid sharp reversals against the preceding trend.
Forex beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are critical for long-term success in trading.
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