The GBP/USD pair pair spent the fifth trading day of the week in the same horizontal channel, which we have already discussed in previous articles. Most of the trading now takes place between the levels of 1.3800 and 1.4000. But the 1.3862 level, which we also paid attention to earlier, does not look strong at this time: last Friday, the price crossed it at least three times. Also, a descending trend line was formed last Friday, but take note that this trend line is rather weak, since it was created inside the horizontal channel. Thus, it plays a certain role, but not too strong. However, this line can still be used as a signal generator. For example, if the price rebounds off it or the MACD indicator turns down around this line, it will be possible to consider options for opening short positions. Or, if this line is surpassed, you can expect the pair to rise to 1.4000.
Four signals were generated on the 5-minute timeframe last Friday, which deserved your attention. The pound/dollar pair was calm at night, but it started to move when the European session was about to begin. The MACD turned to the upside at the very beginning of this session, forming the first buy signal. At that time, the 1.3956 level was not yet there, so you were advised to trade with the 1.3999 target. The bulls failed to reach this goal, so the deal, most likely, was closed by Stop Loss, which should have been set to breakeven when the price went up 15-20 points. Furthermore, the MACD indicator has already formed a sell signal, according to which positions should also be opened - a short position. The closest level was 1.3862 and it was reached during the day - at the very beginning of the US trading session. Thus, traders could get around 60-70 points of profit on this signal. However, this is not all. The 1.3862 level was surpassed, so beginners could stay in short positions or open new ones with 1.3778 as the target, which, however, was not reached. And by that time the price had already gone down by around 80 points, so this sell signal could have been missed. Also, during the processing of this sell signal, the MACD indicator turned to the upside for a short time, however, at that time, the descending trend line on the 30-minute timeframe had already been formed and the Stop Loss was set at breakeven, so there was no particular point in reacting to this MACD reversal: if something happened, the deal would be closed at breakeven. The last buy signal was also a signal to close shorts for those who had not done so before. There was no point in buying the pair any more, since the trading day and the trading week were ending, and the downward trend line made it possible to only trade bearish.
How to trade on Monday:
On Monday, we recommend trading according to the downward trend on the 30-minute timeframe. That is to consider sell signals and ignore buy signals. A price rebound from the trend line or a reversal of the MACD indicator near zero or slightly higher will allow novice traders to reopen short positions. As before, Take Profit can be set at a distance of 40-50 points, and Stop Loss at breakeven after passing 15-20 points in the desired direction. Getting the price to settle above the trend line, on the contrary, will allow opening long positions with the same conditions. You can also open short positions on the 5-minute timeframe based on sell signals from the MACD indicator. It is desirable that the indicator is above the zero mark.
