The GBP/USD pair unexpectedly surged on Tuesday. At the time of writing, the pair went up by 150 pips from the daily low. Notably, the pair was steadily falling in the early hours of trading. However, at the beginning of the European session, market participants started to buy up the British pound despite the lack of any significant economic reports. Moreover, hardly any statistics could have provoked such a movement of 150 pips. Despite the trend movement during the day, the technical picture was still uncertain. The price managed to overcome the trendline during the night trading, which meant the end of the uptrend. However, just a few hours later, it began a strong upward movement. At least, the pair tested the levels very accurately. Thus, despite breaking through the trendline, the uptrend remains in place, while the trend line itself is no longer relevant.
On the 5-minute time frame, the technical picture looks perfect. We could observe precise testing of the levels, a strong trend movement, and clear trading signals. Thanks to the British pound, novice traders could offset the losses from trading the euro/dollar pair. Let's start with the signals. The first one was formed at the beginning of the European session - a rebound from the level of 1.3126. After that, the pair began to grow rapidly and easily overcame the levels of 1.3210 and 1.3241, stopping only near 1.3272. Then, it made a very accurate rebound from it. This is when beginners were supposed to take profit on a long position. The profit could be at least 120 pips. On a rebound from the level of 1.3272, it was also possible to open a short position. However, as the price failed to overcome the level of 1.3241, the trade should have been closed immediately. Even in this case, this trade brought a profit of 10 pips. Traders could have also opened a long position on a rebound from the level of 1.3241. Yet, the pair lost momentum, so the trade had to be closed manually by the end of the session. This trade also brought us a small profit. As a result, today, beginners could experience all the benefits of a trend movement.
Trading tips on Wednesday
On the 30-minute time frame, the pair continues its upward movement, which is no longer supported by the trendline. The price managed to overcome the level of 1.3210 on the third attempt, so the pound may continue to grow in the near future. The fact the pound showed such a strong rise without any obvious reason is a little alarming. Tomorrow, traders may change their mind and sell the pound as rapidly as they bought it today. On the 5-minute chart on Wednesday, it is recommended to trade at the levels of 1.3082, 1.3110-1.3126, 1.3210, 1.3241, 1.3272, 1.3310, and 1.3365. Place a Stop Loss to breakeven as soon as the price passes 20 pips in the right direction. Tomorrow, the UK will release the inflation report which can change the market sentiment. Besides, Jerome Powell and Andrew Bailey will speak tomorrow, possibly giving important hints to the market. Therefore, the trajectory of the pound/dollar pair may be rather uneven on Wednesday.
