The GBP/USD pair traded quite predictably on Wednesday, at first glance, as an upward correction began after a strong fall. The British currency started to fall in the afternoon, as the market remembered that the Federal Reserve meeting was tonight. It has already become known that the US central bank raised the rate by 0.75%, which exceeds most forecasts. Therefore, now we expect a new growth of the US currency. No important report or event in the UK today. But Fed Chairman Jerome Powell's speech can also provoke a market reaction. In general, no one doubts that in the next 24 hours the pound/dollar pair will move very volatilely. After all, the results of the Bank of England meeting will also be announced on Thursday, which is also important. The market is waiting for a 0.25% rate hike, but who knows, maybe there will be surprises? The pair still maintains a downward trend, but the technical picture should be assessed after the market completes the meetings of the Fed and the BoE. Up to this point, the price can move in different directions and very strongly.
You can clearly see on the 5-minute timeframe that the price has been trying to correct for most of the day. It succeeded, but the trading signals were again very inaccurate. It should be noted right away that the 1.2071 level became irrelevant by the end of the day, instead of it there were levels 1.1933 and 1.2106. The 1.1989 level is also new, Wednesday's low. Thus, due to the lack of a sufficient number of levels (the pair is near two-year lows), all trading signals were formed near the level of 1.2071. First, the pair settled above it and went up about 35 points (which allowed us to set Stop Loss to breakeven). Then it bounced off the level of 1.2071 completely inaccurately, this signal should not have been processed at all. Further, the price settled below the level of 1.2071, and this sell signal turned out to be unprofitable, because the pair could not go down even 20 points. The last buy signal was formed too late, so it should not have been worked out. As a result, novice traders finished the day with a small loss.
How to trade on Thursday:
The powerful fall of the British currency continues on the 30-minute timeframe. And it is very difficult to guess what will happen next, since the results of the Fed meeting have already been announced today, but it will take a long time to work out, all tomorrow. Plus, the results of the BoE meeting will be announced on Thursday, which can also provoke strong movements. On the 5-minute TF, it is recommended to trade at the levels of 1.1933, 1.1989, 1.2106, 1.2164, 1.2216, 1.2260, 1.2296. There are simply no other levels below 1.1933 right now. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. As already mentioned, the results of the BoE meeting will be announced on Thursday. This is quite enough for the pair to "fly" all day, coupled with today's results of the Fed meeting.
