The GBP/USD pair showed absolutely nothing on Tuesday. If the euro at least tried to continue growing, the pound did not even do that and ended the day near the opening levels of the day. The ascending trend line has already been canceled, and the whole movement has become more like a flat with a slight upward slope. That is, the trend seems to be there, but it is so weak that it is extremely problematic to work it out. Just like the European Union and America, there was not a single significant event in the UK during the day. There is news of a political and geopolitical nature, but so far they have no effect on the pair's movement. Perhaps in the future the conflict between the European Union and the UK will have a negative impact on the pound. Or the possible withdrawal of Scotland from the UK. But not now. Thus, the British currency is also climbing up with all its might, but it is not doing well. There will be exactly one more important event in the UK this week than in Europe. The inflation report is a really important event and will be released tomorrow.
It is clearly seen on the 5-minute timeframe that the movements during the day again left much to be desired. The market's attempt to take the pair up at the European trading session was offset by bears at the same session. As a result, the currency pair spent most of the day near the level of 1.2260, around which all trading signals were formed. The first, like all subsequent ones, turned out to be false. We warned in recent articles that movements can be as flat as possible, which is what we end up with. Novice traders received a loss of about 25 points on the first sell signal, since the pair did not go in the right direction by even 10 points. The next signal was slightly better, as after its formation the price almost reached the target level of 1.2329, stopping just 5 points away from it. Five points is not an error, but given the high probability of a flat, beginners could close this position manually. At least they closed the loss on the first trade. Then two more buy signals were formed near the level of 1.2260, which should not have been worked out, since the first two were recognized as false.
How to trade on Wednesday:
We formally have an upward trend and a trend line on the 30-minute timeframe, but the trend line is no longer relevant. Thus, for some time the pound may continue its convulsions in an attempt to rise in price against the dollar, but all this looks very unconvincing. The situation may change on Wednesday due to a stronger fundamental and macroeconomic background, but it is unlikely that the British currency will suddenly receive strong support and grow by 100 points. It is recommended to trade on the 5-minute TF at the levels of 1.2164, 1.2216, 1.2260 , 1.2329-1.2337, 1.2371. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. The UK is set to release its May inflation report, and this is the most important event of the day and week. Then we have Federal Reserve Chairman Jerome Powell's speech in America, which is also important, but it is unlikely that he will tell the market anything new.
