The GBP/USD pair continued its upward movement on Thursday, which began yesterday evening. However, it should be noted that the pair did not grow for the entirety of yesterday, as it managed to fall decently before the Federal Reserve meeting. But after the meeting, a growth began that was not completely justified, which continued today. And today it was already fully justified. The fact is that the Bank of England meeting ended with the fact that it unexpectedly raised the key rate. A rate hike is considered a very important event in the foreign exchange market. One of the most important. For the national currency, this is always a bullish factor, so it is not surprising that the pair rose by 85 points in 15 minutes. An hour later the reverse movement began. In general, according to the 30-minute timeframe, we can conclude that a new upward trend is trying to form. It has not yet been supported by either a trend line or a channel, but it still takes place.
On the 5-minute timeframe, the movement of the pound/dollar pair on Thursday was strong and quite beautiful. Since there were many levels, there were a lot of trading signals today. We removed the levels 1.3282 and 1.3351 for today. Let's start analyzing trading signals. First, the pair broke through the levels of 1.3268 and 1.3282, and it was necessary to open long positions on this signal. Unfortunately, the pair was unable to immediately continue its upward movement and the signal turned out to be false. It should have been closed on the next sell signal, and had a 15 point loss. Further, the price settled below the level of 1.3282 and below the level of 1.3268, which could be interpreted as a signal to open short positions. However, in half an hour the results of the BoE meeting were to be announced, so there was no need to risk entering the market, as the reaction could be unpredictable. It was also quite difficult to "play ahead" and open a deal with Stop Loss before this event. Well, then the pair rose by 85 points in 15 minutes and reached the level of 1.3366, from which it rebounded, forming a new sell signal, which could be worked out by a short position. During the downward movement, the pair broke through the levels of 1.3351, 1.3333 and stopped only at the level of 1.3310, where the profit should have been taken. As a result, the day for novice traders ended with a profit of about 20 points.
How to trade on Friday:
The pair was forming a new downward trend on the 30-minute timeframe, but it is very important not to let the quotes drop below the level of 1.3268. In this case, all of the bulls' work will be down the drain. The important levels on the 5-minute timeframe are 1.3268, 1.3310, 1.3333, 1.3366, 1.3407-1.3416. We recommend trading on them on Friday. The price can bounce or surpass such levels. 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. The UK retail sales report will be published on December 17, while in the US no major fundamental and macroeconomic events are planned. Tomorrow we expect a decrease in volatility and quieter movements in the pair.
