The GBP/USD pair also continued to trade inside the horizontal channel on Wednesday. This is clearly seen in the chart. Unlike the euro currency, the pound did not even approach any of the channel's borders and did not try to overcome them. Thus, the pair remains in full flat, and the US inflation report did not help the pair complete it at all. In principle, the reaction to the inflation report was also quite expected. Since its value was not unexpected, we just saw a surge of emotions in the market, but no trend movement began. The pair initially fell by 100 points, and then rose by 100 points. That is, volatility remains high now, but only there is not much sense from this. The pound, like the euro, retains excellent chances of continuing to fall. Despite the fact that the Bank of England (BoE) has already raised the key rate four times, the pound cannot even "find the bottom" of the market at this time. Therefore, if the bulls do not buy the pair, then sooner or later the downward trend will resume.
On the 5-minute timeframe, two trading signals were formed on Wednesday, almost identical to those formed for the euro. The first sell signal was formed near the level of 1.2379 and was almost perfect. After that, the price went down 87 points. And since a stop loss was to be set to breakeven after a 20-point down move on a short position, novice traders could catch almost all the downward movement. The profitability of this trade depends on where the newcomers choose to exit the market. The second sell signal was less accurate and could at first be mistaken for a buy signal. However, even if it was tempting to open a long position, it was not worth it, since the moment when the pair had overcome the 1.2379 level the pair had almost reached the next level of 1.2409. Therefore, in any case, it was necessary to open a short position when the price settled below the level of 1.2379. You could get about 30 points of profit on this transaction, and you had to leave it manually in the late afternoon.
How to trade on Thursday:
The downtrend is still maintained on the 30-minute timeframe despite the flat. The British currency can't do anything against the US dollar, and there are simply no bulls in the market. We see that even in those moments when the pound has a real chance of growth (like last week, when the BoE raised the rate), this currency still does not grow. On the 5-minute TF tomorrow it is recommended to trade at the levels of 1.2250, 1.2379-1.2409, 1.2477-1.2502. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. A whole bunch of reports are scheduled for tomorrow in the UK, the really important one among which is the GDP report for the first quarter. Forecast +1.0% q/q We believe that the actual value may be lower than the forecast, in which case traders will have a new opportunity to sell the pound. Only a value above the forecast (which will be very unexpected) can help the British currency settle above the horizontal channel.
