On Monday, GBP/USD plunged further. Although no significant reports had been published in the United States or the United Kingdom, the market found a reason for a sell-off. At the end of the day, the pound lost 125 pips. The downtrend is now visible to the naked eye, so no trendline or channel is still needed. The levels the pair is now at were formed over a year ago. No wonder, they won't be able to neither provide support or resist the pair. Like the euro, the pound may plunge in the coming days/weeks/ months. However, if the geopolitical situation starts to improve and a breakthrough is achieved in the peace talks between Moscow and Kyiv, the euro and the pound will be able to strengthen. So far, the situation is very complicated, and the market keeps selling off risk assets.
In the M5 time frame, a correction occurred. If not for the corrective move, the technical picture would look perfect. Since the beginning of the correction was impossible to predict, traders were guessing whether it would emerge or not. There had been no rebound from an important level before the correction started. Most of the trading signals of the day cannot be called either false or strong. The first sell signal was made very late. The price broke through 1.3173 and went down by 23 pips, which was enough to place a stop-loss order at the breakeven point. Therefore, beginner traders did not suffer any losses. A buy signal was produced, and the price went up by 20 pips. In that case, the novice did not sustain any losses as well. Two more signals near 1.3173 should have been ignored because the previous two turned out to be false and brought no profit at all. The last sell signal near 1.3134 should have been ignored as well because it was produced very late, and the price had already gone down by 120 pips.
Trading plan for Tuesday:
In the 30M time frame, the bearish trend got stronger on Monday. It is now hard to tell where the price will go as there are just a few signals and all of them are weak enough. In addition, it remains unclear how long the geopolitical situation will be weighing on the market. The target levels in the 5M time frame are seen at 1.3082, 1.3134, and 1.3241. A stop-loss order should be set at the breakeven point as soon as the price passes 20 pips in the right direction. No important fundamentals or macroeconomic events are expected in the United Kingdom on Tuesday. The focus will be solely on the geopolitical background. However, even its absence does not guarantee the beginning of a correction or a lack of downward movement. From the technical point of view, the situation with the pound is rather complex as there are not enough reference points.
