On Thursday, GBP/USD left the sideways channel. The pair started to fall even before the release of disappointing macro reports in the UK. The price dropped by another 30 pips and retraced slightly up after data on US GDP and industrial production came out. The fact that the pair resumed the downtrend and left the sideways channel is really important. UK GDP came in at 0.8% in Q1. Industrial production decreased by 0.2% in March. These results had almost no effect on the market. A strong bullish correction is still expected. The current downtrend seems to be illogical. However, if nobody buys the pair, it cannot show growth.
In the M5 time frame, only one trading signal was made during the day. The pair has not traded so low for more than 2 years. Therefore, there simply cannot be many signals at the current levels. The price consolidated below 1.2250 with the level of 1.2071 seen as the closest target. However, it is impossible that the pair passes about 180 pips every day. In spite of the trend movement during the day, a profit could hardly be made. The only sell signal was created when the price returned to 1.2250 and bounced off it. The quote then went down by 40 pips. The trade could have been profitable in theory. Anyway, it should be closed manually. By the end of the day, the pair got back to 1,2250, so a potential profit could have decreased. In any case, with Stop Loss at the breakeven point (since the pair went down by more than 20 pips), there could not be any loss.
Trading plan for Friday:
In the 30M time frame, the downtrend goes on. The pound is weaker against the dollar as there are no bulls in the market. The pair may remain bearish for a long time because GBP already trades at its lowest levels. Moreover, there have been no factors that could trigger a new fall. Traders are now simply ignoring the factors providing support for the pound. Targets in the M5 time frame are seen at 1.2071, 1.2164, 1.2250, and 1.2379-1.2409. 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. Friday's macroeconomic calendar in the UK contains no important releases. Michigan consumer sentiment will be published in the US. The report could cause a reaction in the market if its actual reading miss the forecast (64.1).
