The GBP/USD pair was also correcting on Friday. The downward movement was quite strong, although there were no important fundamental or macroeconomic events during the day that could provoke such a movement. Nevertheless, the pound fell by 135 points by the end of the day. We have formed an ascending trend line which is not strong. At this time, the price is already near it, so it may try to overcome it on Monday. The pound has the same grounds for growth as the euro. That is purely technical. Still, the pound falls regularly and very strongly. Therefore, upward corrections are required from time to time. This is the only reason to expect the pair to strengthen next week. But consolidating quotes below the trend line is likely to lead to the resumption of the global downward trend. The results of the two meetings of the central banks have already been fully worked out, so volatility may decrease.
The pair again formed a huge number of trading signals on the 5-minute timeframe on Friday. The pair traded between the levels of 1.2260 and 1.2329 throughout the European trading session. And 1.2296 was between these levels, which was recognized as irrelevant by the end of the day. Nevertheless, at least eight signals were formed in this range on Friday. Let's start to figure it out. The first sell signal should have been ignored, since the price at the time of its formation was already near the level of 1.2260. The second - we are working on, the movement ended around 1.2329, profit - 43 points. The fourth - we are working on - closed at Stop Loss at breakeven. The sixth one is being worked out, the movement ended near the level of 1.2260, the profit is 30 points. Some signals duplicated the previous ones, so we do not consider them. The US trading session began with a false rebound from the level of 1.2260. Novice traders lost 35 points on this long position. However, the very next sell signal, when the price settled below 1.2260, was profitable and the last one to be worked out. The price dropped almost to the level of 1.2164, but did not form a single buy signal after that. Therefore, the deal had to be closed manually in the late afternoon. Profit on it amounted to about 50 points. As a result, the day turned out to be quite profitable.
How to trade on Monday:
We formally have an upward trend and a trend line on the 30-minute timeframe. However, it can be overcome as early as Monday. The pound is still very weak, so we can only count on corrective growth. On the 5-minute TF, it is recommended to trade at the levels 1.2040, 1.2106, 1.2164, 1.2216, 1.2260, 1.2329-1.2337, 1.2371, 1.2471-1.2477. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. No major events planned for the UK and the US, so there will be nothing for the market to react to. However, this does not mean that the pair, which has shown hyper volatility in recent months, will stand in one place all day. We believe that active movements may continue on Monday, and the trend line will serve as a reference.
