On Tuesday, GBP/USD moved down without even trying to enter a bullish correction. Over the past 3 days, the pound lost 400 pips, which is too much even for the British currency. The price has long gone below the descending channel. Anyway, the downtrend is now visible to the naked eye in almost any time frame. The quote has been in the bear trend for more than 15 months now. Above all else, the greenback has recently become even stronger. The United Kingdom saw no important macro releases that could trigger a plunge in the pound in the first two trading days of the week. The United States published its durable goods orders statistics on Tuesday. The report came worse than economists had expected. In any case, the results could only drive the greenback down, not up. Nevertheless, they had absolutely no effect on the pair because the downtrend had resumed long before the release and lasted all day long. Traders were able to break the 1.2674 barrier, the 20-month low. They are now pushing the price to the all-time low of 1.1411, last seen 25 years ago.
In the M5 time frame, the pair was in a trend. However, taking into account the fact that the price had not been at the current levels for more than 18 months, we should have expected a limited number of trading signals to be created. So, a few signals were made on Tuesday. Interestingly, levels 1.2674 and 1.2697 should not have been seen as a support zone because the gap between them was as many as 24 pips. However, when the price appeared in the range, it almost came to a standstill, making a few rebound signals. The first sell signal was generated when the quote broke through 1.2697. The price then bounced off 1.2674 and 1.2697, and a breakout at 1.2674 followed. Overall, there were 4 signals made, 3 of which could have brought some 5-10 pips of profit if trades were closed at the right time. The last sell signal was the most profitable one. It was created when the pair broke through 1.2674. As soon as it was made, the price fell by about 35 pips. Since there were no target levels below 1.2674, short positions should have been closed manually.
Trading plan for Wednesday:
In the M5 time frame, the pair was in a trend. However, taking into account the fact that the price had not been at the current levels for more than 18 months, we should have expected a limited number of trading signals to be created. So, a few signals were made on Tuesday. Interestingly, levels 1.2674 and 1.2697 should not have been seen as a support zone because the gap between them was as many as 24 pips. However, when the price appeared in the range, it almost came to a standstill, making a few rebound signals. The first sell signal was generated when the quote broke through 1.2697. The price then bounced off 1.2674 and 1.2697, and a breakout at 1.2674 followed. Overall, there were 4 signals made, 3 of which could have brought some 5-10 pips of profit if trades were closed at the right time. The last sell signal was the most profitable one. It was created when the pair broke through 1.2674. As soon as it was made, the price fell by about 35 pips. Since there were no target levels below 1.2674, short positions should have been closed manually.
