The GBP/USD pair collapsed on the 30-minute timeframe on Thursday, passing about 230 points in a day. It's even hard to remember when the last time a pair passed so much! However, today the Bank of England summed up the results of its meeting in Great Britain, and the meetings of the central banks are the most important event in the foreign exchange market. And most importantly, it is almost always unpredictable. "Unpredictable" not even in terms of decisions made by this or that central bank, but in terms of the market's reaction to this event. For example, today, the decisions made by the BoE did not contribute to the fall of the pound at all. Three instead of two earlier members of the monetary committee voted to cut the stimulus program, and two voted to raise the rate. And this despite the fact that a week ago there was no talk of raising the rate at all! However, the market interpreted these hawkish messages in its own way. He expected that the rate would be raised today, with the help of many well-known banks and experts, but these expectations did not come true. And it turns out that the pound fell down simply because expectations were not met. Although where did these expectations come from? On what basis? Thus, there is a downward trend at this time on the 30-minute timeframe.
The technical picture on the 5-minute timeframe was very attractive today. Still, the pair passed 230 points in a day. However, at the same time, it was quite complicated, and there were a lot of trading signals. Let's figure out which trades should have been opened. The first sell signal should have been worked out when the price crossed the 1.3638 level. It turned out to be quite risky, but at the same time profitable. Although not everything is so simple. Stop Loss for a short position was not set, since the price did not go down 20 points before the US trading session. Thus, the deal should have remained open when the BoE announced the results of the meeting and the collapse began. At the same time, we recommend that novice traders exit the market before important events. Thus, we will assume that the newbies left the market and the trade was closed. The next sell signal should have been worked out when the price settled, and then bounced off the level of 1.3571. Here it was already possible to open positions without fear, and they turned out to be profitable, as the price continued to move downward and overcame the level of 1.3517 on its way. In total, the price went down another 85 points, which was enough to trigger any Take Profit or to close the deal manually at any profit.
How to trade on Friday:
At this time, there is still no trend on the 30-minute timeframe, and the volatility increased rapidly at the end of last week and quickly fell at the beginning of the new one. Since there is no trend, we do not advise beginners to follow the signals on the MACD indicator for some time. A trend movement is required for these signals to be relevant. The important levels on the 5-minute timeframe are 1.3612, 1.3638, 1.3688, 1.3708, 1.3740. We recommend trading on them on Tuesday. The price can bounce off them or overcome them. As before, we set Take Profit at a distance of 40-50 points. At the 5M TF, you can use all the nearest levels as targets, but then you need to take profit, taking into account the strength of the movement. When passing 20 points in the right direction, we recommend setting Stop Loss to breakeven. Novice traders can pay attention only to the index of business activity in the manufacturing sector of the European Union on November 2. This is not the most important report, so it is unlikely that it will have at least some impact on the movement of the currency pair.
