The GBP/USD pair was trading lower on Tuesday. However, the very nature of the movements, as in the case of the EUR/USD pair, was far from ideal. Problems started on the 30-minute timeframe, when the price settled above a strong downtrend line. "Strong" - because it had 4 points of support at once. However, today the pair decided to first break this line and then resume the downward movement. Thus, a buy signal generated near this line turned out to be false and it was possible to exit from it by a downward reversal of the MACD indicator. In general, it turns out that the downward trend has continued, but at the same time, the annual lows set on November 30 have not been updated so far. Strange situation. I would like to believe that this is just a coincidence. It should also be noted that there was no major event or publication in the UK or the US on Tuesday. Thus, novice traders had nothing to react to during the day. However, even without this, the movement was not weak.
On the 5-minute timeframe, the movement of the pound/dollar pair was quite difficult. As we said above, the movement, in principle, was not the most logical, from a technical point of view. The situation was no better at the lower TF. The first sell signal was generated when the pair bounced off the 1.3286 level. After a couple of hours, the pound quotes dropped to the level of 1.3246 and bounced off it, so short positions should have been closed here. The profit on them was 21 points. It was also necessary to open long positions on a buy signal from the level of 1.3246 (there were as many as three in a row), but in none of the three cases the price could not go up at least 20 points, which would be enough to place a Stop Loss order at breakeven. As a result, a long position closed at a loss of about 15 points, when the price settled below 1.3246 and thus formed a sell signal. The pair also managed to reach the nearest target level of 1.3208, so a short position was closed after a rebound from it in a profit of 14 points. And there and then it was necessary to open new deals to buy on the same rebound from 1.3208. As a result, the pair returned back to the level of 1.3246 and bounced off it ideally, forming a new sell signal. Therefore, it was necessary to close longs at a profit of 14 points, and one should not have opened new short positions, since it was already too late. As a result, we managed to earn about 35 points.
How to trade on Wednesday:
At this time on the 30-minute timeframe, the downward trend persists, although at this time it is already completely ambiguous, since today the downtrend line was broken. Thus, in the coming days, traders may try to overcome it again. The important levels on the 5-minute timeframe are 1.3193, 1.3208, 1.3246, 1.3286, 1.3310. We recommend trading on them on Wednesday. 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. There will be no major event or publication in the UK and America on December 8. Therefore, the volatility may be low, and the movement within the day may not be the most beautiful.
