The GBP/USD pair, in spite of everything, continued its upward movement on Wednesday. Not a day earlier, not today, formally, it had no reason to grow. After all, the growth of the pair means the growth of the British pound and the fall of the US dollar. Federal Reserve Chairman Jerome Powell spoke yesterday in the Senate and was hawkish. And any hawkish information (aimed at tightening monetary policy) is a reason for the growth of the national currency, that is, the US dollar. However, yesterday the dollar was falling and the pound was rising. Today it became known that inflation in America continues to grow, which is also a bullish factor for the dollar, as it increases the likelihood of tightening the Federal Reserve's monetary policy. But today, too, the dollar was falling, and the pound was rising. Of course, we can conclude that the market simply does not accept any news related to the tightening of monetary policy, since there have already been a huge number of them in recent months. But still, the last two days, after the pair crossed the trend line twice, the pound still continues to grow.
The movement of the pound/dollar pair on the 5-minute timeframe was quite interesting on Wednesday, but not devoid of false trading signals. The first two sell signals were formed in the morning, when the price first crossed the 1.3638 level and then bounced off it from below. At this point, novice traders could open short positions. However, the downward movement could not continue for a long time, and the price failed to go down by 15 points, so Stop Loss could not be set to breakeven. After that, the pair returned to the level of 1.3638 at the beginning of the US session, and then surpassed it, forming a buy signal. Strictly speaking, there was no need to open a long position at that moment, since the signal was formed literally half an hour before the release of the inflation report. But since there was already a buy signal, it was possible to take a risk and open a long position with Stop Loss below 1.3638 in case the traders' reaction was positive for the dollar. But in the end, the upward movement continued and those newcomers who opened a deal here could earn from 40 to 60 points, since the movement ended only around the level of 1.3708. A loss of 16 points was received on the first trade.
How to trade on Thursday:
In the 30-minute TF, the upward trend continues simply because the price continues to go up. Thus, although the upward trend line is no longer relevant, long positions remain preferable. It is recommended to trade at the levels of 1.3638, 1.3688, 1.3708, 1.3740 at the 5-minute TF tomorrow. The price can bounce off these levels, or it can 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. No important report from the UK tomorrow, and only secondary data will be released in the US, which is unlikely to seriously interest market participants.
