The GBP/USD pair traded more actively than EUR/USD on Wednesday. However, the price did not leave the sideways channel and kept trading in the 1.3488-1.3580 range. After it had bounced off the cannel's upper limit, a sell signal was produced. Thanks to the strong level of 1.3580, the pound/dollar pair went down by 50 pips from the low to the high. Given the current volatility level, it was a rather nice move. So, what can we expect from it? Like in the case of EUR/USD, we can expect nothing due to the empty macroeconomic calendar and the absence of any fundamentals. The market is likely to remain flat at least until any reports are published or any events unfold.
In the M5 time frame, trading was extremely difficult. The levels of 1.3563 and 1.3580 stood as resistance. The novice were warned yesterday that as soon as the first signal indicating a flat occurred, they should no longer enter the market. Moreover, the pair had moved sideways for a couple of days and had traded in the range between 1.3563 and 1.3580 for 6 hours. As soon as it approached 1.3563, the movement was supposed to become more evident. However, beginners were still unable to enter the market due to the fact that the signal had been produced too late. By that time, the market had already turned flat again and volatility had been at a low level. In addition, that signal could be called neither strong nor accurate. Technically, the novice could have opened short positions. If they did, they earned a profit of 5-10 pips.
Trading plan for Thursday:
In the 30M time frame, the downtrend has emerged. The pair has traded in the sideways range between 1.3488 and 1.3580 for 4 days. The quote may leave the cannel when the US inflation report is released. If not, it may happen on Friday after the publication of important statistics in the United Kingdom. The target levels in the 5M time frame are seen at 1.3431-1.3439, 1.3488, 1.3563-1.3580, 1.3598-1.3603, and 1.3652-1.3660. A stop-loss order should be placed at the breakeven point after the price has passed 20 pips in the right direction. The United Kingdom's macroeconomic calendar will be empty on Thursday. Meanwhile, inflation in the United States is estimated to hit the 40-year high of 7.3% y/y. The greenback may strengthen versus the euro and the sterling due to continuing inflation. All in all, traders should prepare for any outcome because the actual result may differ from the market forecast.
