During the day, GBP/USD was slowly moving towards the level of 1.3923 and has hardly reached it on the 30-minute time frame. There is still no clear trend for the pair. There is no trendline, no trend channel, and even no side channel or a pronounced flat movement. The pair continues to trade in a swing mode, so its trajectory is very hard to predict. Formally, an ascending trendline is still in place. However, it raises a lot of questions since there is a trendline but there is no upward movement. After the price jumped on Monday in an attempt to correct after Friday's fall, the highs near the 1.3923 area have not been tested. Today, the price has again approached this level. Thus, the situation for the pound sterling remains too uncertain to work on the current time frame. In the previous article about the pound, we did not recommend following any of the MACD signals. It would be better to ignore signals from this indicator for a while.
In the course of the day, only two trading signals were generated on the 5-minute time frame, and it is good than there were no more signals. As we mentioned above, volatility on the pair was low today, and on the 5-minute time frame it resembled a flat movement. The pair spent the whole day trading in the range of 50 pips. Thus, trading in such conditions was extremely inefficient. So, the fewer trades were opened, the better it was. The two sell signals were formed around the 1.3923 level. The maximum distance that the pair passed after their formation was 25 pips. This was enough to set a Stop Loss to breakeven where this sell trade was actually closed. I wonder if it is still worth mentioning the macroeconomic data for today. The ADP report was weaker than expected but better compared to the previous month. The US ISM Services PMI turned out to be worse than forecasted and weaker than in the previous month. In the first case, the US dollar gained 20 pips, in the second case, it lost those 20 pips. Novice traders should remember that a fall in the pound /dollar pair means that the US dollar is strengthening while the pound is declining, and vice versa. Thus, the influence of the economic data on the pound/dollar pair was minimal on Wednesday.
Trading tips for Thursday:
At this time, there is still no trend on the 30-minute time frame. There is a swing movement instead. Therefore, it may be a good idea to ignore any buy or sell signals from the MACD indicator for a while. It is better to trade on a 5-minute time frame where the key levels are 1.3838, 1.3865, 1.3923, and 1.3947. The price may either bounce off or break through them. As usual, we set Take Profit at a distance of 40-50 pips. You can also use all the nearest levels as targets. In this case, you need to take profit considering the dynamics of the movement so as not to close the trade too early. If the nearest level is located too far and the volatility is low, then it is recommended to maintain the trade in a manual mode, tracking changes in the market. When the price passes 20 pips in the right direction, we recommend setting Stop Loss at the breakeven point. On Thursday, the Bank of England will announce the results of the policy meeting. Although markets do not expect any surprises from the regulator, volatility in the pound /dollar pair may still increase during the publication of the results. Therefore, we recommend that you trade very carefully at this time or avoid entering the market.
