The GBP/USD pair continued its downward movement on the final trading day of the previous week. The movement was weak, and volatility was lower than for the EUR/USD pair, which is extremely rare. As a result, the price overcame the previous local low - the level of 1.3571, which indicates the continued fall of the British pound. In principle, the pair's fall on Friday was justified. A report on retail sales was published in the UK in the early morning, which turned out to be significantly worse than forecasts. We cannot say that traders sold the pair all day based on this report alone, but there were no other important events during the day. After a fairly long rise, the pound continues its slow decline, and we believe that it will continue. In the new week, all attention will be focused on the Federal Reserve meeting, which can greatly affect the overall mood of the foreign exchange market.
On the 5-minute timeframe, the movement of the pound/dollar pair was sideways for most of the day. That is, in fact, the price fell by 30 points only in the middle of the European session, and it was flat for the rest of the day. It turns out that the drop just happened after the release of retail sales. However, this makes it harder for us, since it is extremely difficult to trade with such a movement. Three trading signals were formed during the day - all around the level of 1.3572. It is very good that there was not one outright false one among them, which would have led to a loss, although formally all three turned out to be false, since the price could not work out even the nearest target of 1.3531. However, novice traders could and should have opened short positions after crossing the 1.3572 level. Subsequently, the high by which the price dropped was 15 points. That's how much the newcomers could earn on Friday. But what is surprising here if the total volatility of the day was 56 points?
How to trade on Monday:
The price left the descending channel very quickly on the 30-minute TF, but the downward trend persists. We warned about this, because the channel was very narrow and short-term. Thus, the downward movement can continue in the same unhurried style. The pound has few grounds for growth now, but there will be several very important events in the US next week that could lead to a rise in the dollar. On the 5-minute TF, it is recommended to trade by levels 1.3488, 1.3521-1.3531, 1.3572, 1.3598-1.3603, 1.3652-1.3660. Indices of business activity in the service and manufacturing sectors will be published in the UK tomorrow. If their values turn out to be much lower than forecasts, this may provoke new short positions on the British currency. US business activity indices are less likely to affect the course of trading, but they also do so.
