The GBP/USD pair also rose rather unexpectedly on Monday. The price confidently overcame the upper limit of the descending channel, so there were no questions at this moment. Recall that we warned about a possible "flat exit" of quotes from the channel. In this case, the buy signal would be weak. But in our case, the price quite confidently left the descending channel, so it was possible to open long positions even on this signal. In general, nothing happened on Monday that could provoke the growth of the British pound by 150 points. There was not a single interesting report or other event in either the UK or the US. In our EUR/USD review, we suggested that the euro's rise could be related to the upcoming European Central Bank meeting, but this meeting has nothing to do with the British pound or the dollar. And there are no meetings of the Bank of England or the Federal Reserve scheduled for this week. Thus, it looks like we are dealing with the usual technical correction after a long decline. If so, then it may be short-lived, like almost all corrections within the current downward trend, which has been going on for more than a year and a half.
The movements and signals on the 5-minute timeframe were quite good on Monday, although not perfect. The first sell signal in the form of a rebound from the level of 1.1898 turned out to be false. The price could not go down even 20 points, so Stop Loss could not be set to breakeven. This was followed by a buy signal near the same level, which has already brought profit to novice traders, as the pair rose to the target level of 1.1967 (error 2 points) and rebounded from it, forming a new sell signal. Unfortunately, it also turned out to be false, but this time the pound managed to go down 20 points, so the Stop Loss had to be set to breakeven. The next buy signal near the 1.1967 level also turned out to be false, but this time the pair again failed to go in the right direction for at least 20 points, so this deal also received a small loss. Two more signals were formed near the level of 1.1967, the last of which could bring profit to novice traders, but these signals should no longer be worked out, since by the time they were formed near the level of 1.1967, two false signals had already been formed. As a result, due to false signals, the total profit of the day did not exceed 5-10 points.
How to trade on Tuesday:
The pair left the descending channel very quickly and cheerfully on the 30-minute TF, so an upward movement may be observed for some time. We do not believe that it will be long-term, as it seems that the market just started taking profits on short positions, which led to a rollback to the upside. On the 5-minute TF on Tuesday it is recommended to trade at the levels 1.1807-1.1827, 1.1898, 1.1967, 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. The release of reports on unemployment and wages is scheduled for Tuesday in the UK. This is not the most important data at this time, so we do not expect a serious reaction to it. In the evening there will be a speech by Bank of England Chairman Andrew Bailey, who is also extremely rarely eloquent. There will be no important events or publications in the US on Tuesday at all.
