On Monday, GBP/USD tried to fall to its 15-month low at around 1.2980. So far, this has been the barrier restraining GBP from weakening further versus the dollar. During the North American session, bulls did not allow the pair to touch the mark. Therefore, the quote is highly likely to retest this point later. But the very fact that the pair has been hovering around lows for a while signals an impending breakout. Same for EUR/USD: the price is in a clear downtrend, hovering around 15-month lows. In addition, there is no trend line or a channel, but all factors signal the extension of the bearish move. On Monday, no macro events unfolded neither in the United Kingdom nor in the United States. Clearly, news comes in occasionally. However, Boris Johnson's latest announcement to provide financial and military support to Ukraine is unlikely to trigger a strong movement of the pair.
In the M5 time frame, the quote traded sideways on Monday. In fact, the pair returned in the 1.2981-1.3049 sideways channel. A single trading signal was created during the day. It was a signal to sell the instrument. Above all else, it was an accurate one. Volatility on GBP/USD totaled about 60 pips. Therefore, it was a nice opportunity to test this signal. Moreover, the price bounced off 1.3042. As soon as the signal was made, the quote fell by just 10-15 pips. This was exactly how much profit beginners could have made from a sell trade. The position should have been closed manually because the pair failed to reach the 1.2993 level. However, in the face of the flat market and low volatility, even 10-15 pips of profit is already a good result.
Trading plan for Tuesday:
In the 30M time frame, the pound keeps trading in accordance with its own rules and logic, which ordinary market participants can hardly understand. Last week, the pair traded sideways for four days. Then, it unexpectedly soared by 170 pips and plunged by 120 pips the following day. Next, the quote traded flat for two days with volatility being low. As a reminder, there were no important fundamentals or macro events in those two days but for UK inflation on Wednesday. Meanwhile, the movement began at night. On Tuesday, the target levels in the 5M time frame are seen at 1.2913, 1.2981-1.2993, 1.3042-1.3049, 1.3102, 1.3145, and 1.3210. A stop-loss order should be set at the breakeven point as soon as the price passes 20 pips in the right direction after a trade has been opened. The macroeconomic calendar will again be empty in the UK and the US on Tuesday. Moreover, volatility is likely to remain at a low level. Therefore, beginner traders should prepare for the market being flat for yet another day.
