The GBP/USD pair did not show anything significant on Friday either. The volatility of the day was about 100 points, which is quite a lot, but in recent weeks we have become accustomed to such values, so they do not seem to be something special now. Let's clarify that the pair passed 100 points on a day when neither the US nor the UK had a single important macroeconomic event. Now the market is very active, the downward trend is very strong. This may not be visible on the 30-minute timeframe, but when switching to higher charts, the entire force of the British pound's decline is clearly visible. Also note that the pair is still unable to correct normally. It spent several days in a horizontal channel between the levels of 1.2260 and 1.2405, but after that it started a new fall anyway. Thus, this week the pound may continue to decline, although we believe that it is already very much oversold, and all the factors of the decline have already been worked out for it. Unfortunately, at this time there is no trend line or channel that could provide additional guidance. However, novice traders can switch to higher time frames and form them there.
Only one trading signal was formed on the 5-minute timeframe on Friday. At the beginning of the US trading session, the pair fell to the level of 1.2164 and rebounded from it. Thus, beginners should have opened long positions at this moment. By the end of the day, the pair rose to the nearest target level of 1.2260 and completed it. Long positions should have been closed at this moment, which brought a profit of at least 60 points. However, this level was worked out quite late in time, so the deal could have been closed manually earlier. The level of profit from this practically did not change. In general, there are still very few trading levels at current price levels, since this is the lowest value for the last two years. The pair has not been traded here for a long time, so there are practically no levels here. And, as a result, few trading signals are formed.
How to trade on Monday:
The downward trend still persists on the 30-minute timeframe. There are still practically no bulls on the market, which leaves a very small number of chances for the pound to show serious growth in the near future. Therefore, overcoming the level of 1.2260 will mark a new possible round of strengthening of the British currency with 1.2405 as the target, but even such a movement (by a total of 250 points up) will not be considered a strong correction or the beginning of an uptrend. In order to identify the beginning of a new trend, the pair must overcome its local highs. For example, the closest on the 4-hour timeframe is 1.2637, the peak of May 4th. On the 5-minute TF it is recommended to trade at the levels 1.2071, 1.2164, 1.2260, 1.2379-1.2409. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. No important events are scheduled in the UK and the US on Monday, but this week there will be several important publications in Great Britain. The pound, of course, will hope for their positive values, but everything will depend on the mood and reaction of the market.
