The corrective move on GBP/USD continued on Wednesday. The price tested the descending trend line by the end of the day. However, it was the trend line that approached the price, and not vice versa. So, the correction is still weak. The pound/dollar pair might show sharp movements and frequently reverse on Thursday due to the Fed and BoE meetings. Naturally, given such a fundamental background, it is impossible to assume in what direction the price will go in the next 24 hours. Therefore, the novice should not enter the market until both meetings are over and the market digests their outcomes.
In the M5 time frame, the technical picture does not look very nice. Due to volatility of about 80 pips, the price traded sideways during the day. Overall, a few trading signals were made on Wednesday. All of them were made near the 1.3082 level. The price broke through the mark and then bounced from it four times. The novice would have highly unlikely made any profit. The pair went up by about 20 pips every time but could not consolidate below 1.3082 even once. Therefore, all trades opened on Wednesday had to be closed manually and most likely at the breakeven point. The Federal Reserve announced it would raise rates by 0.25%. The Bank of England may well do the same.
Trading plan for Thursday:
In the 30M time frame, the pair finally tested the trend line. Due to the FOMC meeting, it is hard to tell whether the price will be able to extend growth if it breaks through the trend line. The technical picture might become clearer as earlier as by the end of Thursday. The target levels in the 5M time frame are seen at 1.3000, 1.3026, 1.3082, 1.3124-1.3134, and 1.3193. A stop-loss order should be set at the breakeven point as soon as the price passes 20 pips in the right direction after a trade has been opened. The Bank of England monetary policy meeting will be the central event of the day. At the same time, the pair might still trade under the influence of the FOMC meeting. Overall, Thursday might be a volatile day in the market. Therefore, traders should be extremely cautious when trading the instrument.
