The trend movement of GBP/USD on Wednesday was not as strong as on Tuesday. However, the sterling failed to break through the swing low and then rebounded from it. This means that the market may enter an upward correction. At the same time, the quote's attempt to consolidate above 1.3365 was unsuccessful. Therefore, the pound is still weaker against the US dollar. The market is now in a downtrend although there is no trend line or a channel. The price may rapidly change its movement due to high volatility. Moreover, the market shows no reaction to macroeconomic data. On Wednesday, only Fed Chairman Powell's speech was able to somehow affect market sentiment intraday. At the same time, it does not mean it will have a long-lasting effect. The bearish trend may resume already on Thursday. Unfortunately, the trend is now in the hands of geopolitical background, not macroeconomics.
In the M5 time frame, quite accurate signals were produced. So, two sell signals were generated near 1.3310, and the price then went down to 1.3272 and rebounded from it. Thus, beginner traders had a clear entry point as well as a clear exit point. That trade could have brought them about 20 pips of profit. When the quote retraced up from 1.3272, it was the time to go long. However, this trade most probably closed at the breakeven point after a stop-loss order had triggered. The price plunged twice before reaching 1.3310 and breaking through it. A row of mixed signals was produced near that point. Eventually, this level was erased from the chart. Those mixed signals were hard to interpret as they were formed with a time gap of 5 to 10 to 15 minutes. Therefore, the decision to close long positions and exit the market would have been the perfect solution. Chairman Powell's testimony then started. Technically, there was one more buy signal after a rebound from 1.3310. It was clear and accurate, but it should have been ignored to avoid possible risks.
Trading plan for Thursday:
In the 30M time frame, the price rebounded from 1.3272 twice. So, the bearish trend stopped for a while. If traders break through 1.3356, the bullish trend is likely to extend. Otherwise, the quote may fall to 1.3272. The target levels in the 5M time frame are seen at 1.3241, 1.3272, 1.3310, 1.3365, and 1.3431-1.3440. A stop-loss order should be set at the breakeven point as soon as the price passes 20 pips in the right direction. The services PMI is scheduled for release in the United Kingdom on Thursday. In the United States, Fed Powell's testimony will continue, and the ISM services PMI will be published. This is going to be an important report, unlike to one to be released in the UK. So, traders should pay attention to the event to unfold in the US. Of course, the geopolitical situation will be weighing on the pair on Thursday.
