The GBP/USD pair first tried to resume the downward trend on Friday, and then to complete it again. As a result, at first we saw a rebound from the upper border of the descending channel, and then - the return of quotes to it. Recall that important macroeconomic events on Friday were scheduled for the second half of the day. Consequently, in the first half of the day the US dollar rose by 100 points for absolutely no reason. But in the afternoon, when Nonfarm came out, the US currency was already getting cheaper, although the report itself was stronger than forecasts. These are the illogical movements we saw on Friday. Nevertheless, it is not worth denying that there were movements, and movements are better than flat. It is also worth remembering that the pound survived the breakup with Boris Johnson this week. More precisely, the separation has not happened yet, but Johnson has already resigned. He is expected to remain prime minister until the fall, when a new leader of the Conservative Party is elected. It is difficult to say whether the markets reacted positively to this news, the pound still remains close to its 2-year lows. But, if the price consolidates above the channel, this can be considered a signal for a possible growth of the pound.
Friday's movements were not the best on the 5-minute timeframe, as were the trading signals. Despite the fact that we first saw a 100-point decline and then a 100-point rise, the pair changed direction very often during the day. By and large, we can single out only two signals that deserve attention. The price initially settled below the level of 1.1989 during the European trading session, and then above this level. It was possible to open short positions in the first case, but the pair did not reach the nearest target level of 1.1898, so the deal was most likely closed by Stop Loss at breakeven. Then it was necessary to open long positions in the second case, but this deal was also closed by Stop Loss at breakeven. Accordingly, we received two false signals and all subsequent signals near the level of 1.1989 should no longer be processed, so we did not even mark them in the chart. Moreover, important statistics were published in America at the very beginning of the US trading session, and the market began to blatantly rush from side to side.
How to trade on Monday:
The pair continues to be within the descending channel on the 30-minute timeframe this week. However, it can leave this area at the beginning of a new week. We still do not believe that the pound would sharply rise, however, if it settles above the channel, it will be impossible to ignore it. On the 5-minute TF on Monday, it is recommended to trade at the levels 1.1875-1.1898, 1.1989, 1.2048, 1.2106, 1.2170. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. There are no major fundamental events or macro releases scheduled for the UK and US on Monday. Thus, there will be nothing for traders to react to, but both major pairs still continue to trade volatilely, so there will most likely be movements.
