The GBP/USD pair collapsed without warning on Friday. The fall began with the opening of the London Stock Exchange and at the very beginning of the European trading session. It was at this time that a retail sales report was published in the UK, which turned out to be slightly worse than forecasts. However, this report, from our point of view, was only a formal reason for new short positions on the British currency. An ordinary report could not provoke a 200-point drop in the currency. If this were a reality, then all pairs on the foreign exchange market would "fly" every day at distances of 200-300 points. Thus, we tend to believe that the market has been planning to start a new round of shorts on the British pound for quite a long time, but could not find the right time to start implementing its plan. That day came on Friday. As a result, the pair has updated its 15-month lows and continues to move steadily down. The trend remains downward, which is clearly visible on the higher TF. It doesn't make much sense to consider the rest of Friday's macroeconomic reports, since the pair has been falling all day, regardless of other events. Also, there is now a descending channel on the 30-minute TF, but it is quite formal, has a weak angle of inclination, is too wide, and the price on Friday managed to settle below it.
The pair's movement on Friday was almost perfect on the 5-minute timeframe. Almost all trading signals of the day were strong and accurate. Once again: when the movement is strong and trending, there are no problems with trading. The first sell signal was formed with some delay. The price overcame the area of 1.2981-1.2993, after which novice traders had to open short positions. Subsequently, the pair overcame the level of 1.2913 and dropped to 1.2860, from which it rebounded. Thus, one could earn around 94 points on the short position. Further, long positions should be opened at a buy signal near the 1.2860 level. The pair was able to grow to the nearest target level of 1.2913 and rebounded from it, forming a new sell signal. Thus, the longs should be closed in profit by about 27 points and then open new shorts. The pair again dropped to the level of 1.2860, bounced off it, but later overcame it. It was absolutely necessary to close short positions (the profit is still about 20 points) on the rebound from this level, but it was probably not necessary to open long positions or short ones at the next sell signal, since it was nearing evening and the market was closing for the weekend. But even the last sell signal could eventually bring profit to novice traders. As a result, we managed to earn at least 140 points during the day.
How to trade on Monday:
The downward trend persists on the 30-minute TF despite the fact that in recent weeks the pair continues to move absolutely erratically: either in a flat, then on a "roller coaster", then according to "its own rules". However, if you move to a higher TF, then the downward trend is clearly visible. The pound still cannot even really begin an upward correction, and most factors continue to support the fall of the pound/dollar pair. On the 5-minute TF tomorrow, it is recommended to trade by levels 1.2674, 1.2860, 1.2913, 1.2981-1.2993. When the price passes after the opening of the transaction in the right direction, 20 points should be set to Stop Loss at breakeven. There are no important events or publications scheduled for tomorrow in the UK and America. Thus, volatility will definitely be lower tomorrow, and the pair should start an upward correction.
