The GBP/USD pair also showed an upward movement as part of the upward trend on Monday, which is supported by an ascending trend line. Thus, from the perspective of technical analysis, everything was absolutely logical. We did not expect that the week would begin with a new strengthening of the British currency by 100 points, however, traders found grounds for new long positions. And this is very good for the pound, as it increases the likelihood that the bad times are over for it. Of course, fundamental and geopolitical factors remain relevant, which at any moment can worsen and provoke new declines for the pound. However, while this is not the case, the British currency can count on continued growth. Bank of England Chairman Andrew Bailey gave a speech in the UK, but by tradition he did not say anything important and interesting for the market. This is clearly seen in the pair's movement, which was smooth and even throughout the day. Thus, traders remain bullish until the price settles below the trend line.
Monday was very good on the 5-minute timeframe - trending and quite strong. Unfortunately, it was not possible to work out most of it, since the first trading signal was formed only almost at the US trading session. The pair did not reach the levels during most of the European trading session. So, the first sell signal was formed when the price rebounded from the 1.2596-1.2601 area. After that, the price went down by about 30 points, which was enough to put Stop Loss at breakeven. Therefore, absolutely no loss was received on the short position. Profit on this transaction could only be obtained if it was closed manually. The second signal for short positions with an error of three points was formed near the same area at 1.2596-1.2601. The pair went down about 20 points after it formed, which again was enough to set Stop Loss to breakeven. But it was already possible to make a profit on this transaction, since it had to be closed manually in the late afternoon. Of course, you could earn more, but a small profit is better than a loss.
How to trade on Tuesday:
The upward trend is still maintained on the 30-minute timeframe. Thus, novice traders can still count on the pound's growth. Although there are no compelling fundamental or geopolitical reasons at the moment, the pound may still rise in price due to a technical factor. On the 5-minute TF on Tuesday it is recommended to trade at the levels of 1.2405, 1.2499, 1.2596-1.2601, 1.2674-1.2697. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. The UK is set to publish indexes of business activity in the services and manufacturing sectors. And exactly the same reports will be released in the US. This data is unlikely to provoke a reaction of more than 20 points, if at all. Therefore, the most important event of the week will be Federal Reserve Chairman Jerome Powell's speech in the evening. Although we believe that Powell's position is clear as day, he can still stir up the currency market. True, by the time his speech begins, novice traders will already have to leave the market and close all transactions.
