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The GBP/USD pair sustained its upward movement on Tuesday, but the British pound has its own story. While the euro occasionally takes a break and corrects, the pound can steadily rise daily. Is it worth mentioning that there is no logic in such a movement? However, you can't dictate to the market's major players, and they persistently push the pair upwards. Technically, everything looks very appealing. There is a clear uptrend, and the price rises almost daily. So, if you ignore the macroeconomic and fundamental factors, trading right now is relatively straightforward. However, explaining why the British pound appreciates almost daily is much more challenging. There were no significant events in the UK or the U.S. yesterday, so it's clear that what we saw was not a reaction to anything. The market continues to buy the pound, and that's it.
Five trading signals were generated in the 5-minute time frame on Tuesday, all around the 1.3365 level. Initially, there were two bounces off this level, which allowed a slight downward correction. However, the market is currently not interested in selling the pound or taking profit on long positions, so the 1.3365 level was breached, and the price bounced off this level twice more from above. The sell trade was unprofitable and closed at Stop Loss, while the buy trade allowed a profit of about 40 pips.
In the hourly time frame, the GBP/USD pair spent several weeks "struggling," attempting to correct at least a little. It didn't work out. As a result, the market decided to price in the Bank of England and Federal Reserve meetings in advance and then do it again. Thus, the British pound is rising again, regardless of fundamentals and macroeconomic factors. How long this movement, which no one can explain, will continue is unknown.
On Wednesday, the British pound might continue moving upward because what could stop it? The market keeps buying, so what reason does the pound have to fall? The price has reached the resistance area of 1.3417-1.3440, but does anyone believe this zone can halt the pound's relentless growth?
In the 5-minute time frame, trading can be done at the following levels: 1.2913, 1.2980-1.2993, 1.3043, 1.3102-1.3107, 1.3145-1.3167, 1.3225, 1.3272, 1.3365, 1.3417-1.3440, 1.3488, and 1.3537. No significant events are scheduled for Wednesday in the UK or the U.S., but that doesn't mean much. The market might continue buying the pound regardless of any developments. A pause is also possible, but the pair is unlikely to decline significantly.
1) The strength of a signal is determined by the time it takes for the signal to form (bounce or level breakthrough). The less time it took, the stronger the signal.
2) If two or more trades were opened around any level due to false signals, subsequent signals from that level should be ignored.
3) In a flat market, any currency pair can form multiple false signals or none at all. In any case, it's better to stop trading at the first signs of a flat market.
4) Trades should be opened between the start of the European session and midway through the U.S. session. After this period, all trades must be closed manually.
5) In the hourly time frame, trades based on MACD signals are only advisable amidst good volatility and a trend confirmed by a trendline or trend channel.
6) If two levels are too close to each other (5 to 20 pips), they should be considered a support or resistance area.
7) After moving 20 pips in the intended direction, the Stop Loss should be set to break even.
Support and Resistance price levels: targets for opening long or short positions. You can place Take Profit levels around them.
Red lines: channels or trend lines that depict the current trend and indicate the preferred trading direction.
The MACD indicator (14,22,3): encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a source of signals.
Important speeches and reports (always noted in the news calendar) can profoundly influence the movement of a currency pair. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to avoid sharp price reversals against the prevailing movement.
For beginners, it's important to remember that not every trade will yield profit. Developing a clear strategy and effective money management is key to success in trading over the long term.
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.
