The GBP/USD pair has been trading in a very limited range today. In general, the last few days have passed in a very limited range. The pair, of course, managed to settle below the level of 1.2597, but by the evening it returned to the area above it. Therefore, the pound continues to be close to its local highs. This is what we talked about in the article on the euro/dollar. Even if the ascending trend line is overcome, it is not a fact that a downward trend will now begin. For the pound, the trend line has already been transformed once to take into account all the turns of the movement. Thus, the chances for the fall of the British currency are now greater, but not by much. Neither the US nor the UK published a single important report on Tuesday, there was not a single important event. Nevertheless, the pound showed a volatility of about 100 points, so after two days of relative calm, the pair is trading very actively again. This gives us reason to expect that the trend movement will continue in the near future. I really don't want to start "swings", "borders" and flat.
The pair formed such signals on the 5-minute timeframe today that it would be better if it did not form them. In principle, the chart above clearly shows the nature of the movement of the pair during the day. It can hardly be called a calm trend movement, which we recommend that novice traders work out in the first place. Six signals were formed at the European trading session, all in the area of 1.2597-1.2616. Therefore, signals for a rebound from the boundaries of this horizontal channel clearly should not have been worked out. However, one false signal was formed when the pair settled above the level of 1.2616. Unfortunately, it closed at a loss. The next signal worth trying to work out is consolidating under the level of 1.2597. After that, the price went down about 20 points and bounced perfectly from the level of 1.2559. Therefore, a profit of 15 points could be obtained. It was also necessary to work out a signal to buy in the form of a rebound from 1.2559, after which the pair went up 60 points. A long position should have been closed when the price fell below the level of 1.2616. Thus, a total of three positions were opened, of which two turned out to be profitable and covered the loss on the first trade.
How to trade on Wednesday:
The upward trend is formally canceled on the 30-minute timeframe, however, the pair continues to remain close to its peaks, so it can still resume. There will no longer be a trend line, which complicates the process of trading and determining the trend. The pound must now decide in which direction to move further. On the 5-minute TF it is recommended to trade at the levels 1.2471-1.2477, 1.2559, 1.2597-1.2616, 1.2659-1.2674, 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 and the US are set to publish indexes of business activity in the manufacturing sectors. This is far from the most significant data, so the reaction to them can follow only if the actual and forecast values differ greatly from each other. Slightly more likely to not be ignored is the ADP report.
