The pound/dollar pair resumed its downward movement on Thursday and was sliding almost all day long. The pound is now heading towards its swing lows at around 1.3272. The quote is now feeling bearish pressure as sellers keep pushing it down. The market shows no reaction to any macroeconomic data. Nonfarm Payrolls will be released in the United States on Friday. The report may somewhat affect the market. On Wednesday, Fed Chairman Jerome Powell said he would back a quarter point hike, effectively putting to rest debate over starting a round of rate hikes with a larger than usual half-point increase. Consequently, the greenback dropped but then recouped losses in a couple of hours. Generally speaking, markets are buying out the US dollar amid geopolitical risks related to the armed conflict in Ukraine, thus boosting its growth.
In the M5 time frame, the quote moved in a trend, but just three trading signals were produced during the day. All of them were generated near the 1.3365 level. The price failed to rise by 20 pips after the first two buy signals had been made. Therefore, beginner traders could not have placed a stop-loss order at the breakeven point. Consequently, just one long position could have been opened and closed when the price settled below 1.3356 and a sell signal was made. The first trade turned out to be unprofitable. As for the short position, the price went down by 30 pips, and beginner traders were able to close it manually by the end of the day and receive a profit that offset losses of the first trade. Overall, it was not a productive trading day. The price is expected to drop to 1.3272 and break through it shortly, marking its third breakout attempt.
Trading plan for Friday:
In the 30M time frame, the bearish trend has resumed, and the pound sterling, as a risk asset, is descending. The trend is expected to remain bearish in the next several days. The price is hovering around its swing lows, confirming bearish bias. The target levels in the 5M time frame are seen at 1.3241, 1.3272, 1.3310, 1.3365, 1.3417, and 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 construction PMI is scheduled for release in the United Kingdom on Friday. It will unlikely affect the market. In the United States, Nonfarm Payrolls will be published. Traders may ignore the outcome of the report as well, especially if it comes in line with the market forecast (400K). Other reports will be of secondary interest. Therefore, markets will focus their attention solely on the geopolitical situation and Nonfarm Payrolls.
