The GBP/USD pair showed a rather significant fall on Friday. The volatility of the day was 105 points and the British pound fell as much against the dollar. It should be noted that the dollar paired with the pound reacted much more adequately to the US NonFarm Payrolls report. The US currency strengthened by 70 points after the report was published, in contrast to the euro, which showed a very modest decline. However, the decline had almost no effect on the technical picture on the 30-minute timeframe. The pair spent the last three trading days between the levels of 1.2477 and 1.2597. Therefore, a rebound from the level of 1.2477, near which the price is already now, can provoke a round of upward movement, and then the entire movement of the last few days can already be characterized as a flat. Formally, we also have a downward trend, which was formed after overcoming the ascending trend line last week. However, it is not possible to form a trend line or a channel now. If we take into account the general fundamental background, then the pound is much more likely to continue falling than to start a new growth. But, at least on Monday-Tuesday, the pair will need to urgently overcome the level of 1.2477 in order for the downward movement to continue.
Three trading signals were formed on the 5-minute timeframe on Friday, which are almost identical to the trading signals for the euro/dollar pair. First, the pair formed a buy signal, which turned out to be false, then broke the 1.2559 level, forming a sell signal, and then bounced very inaccurately from the 1.2559 level from below, forming the best signal of the day. A loss of about 20 points was received on the first long position. After the second signal, the pair went down about 30 points and returned to 1.2559, so the short position was closed, most likely, at breakeven by Stop Loss. The third short position led to a profit of at least 50 points; it had to be closed manually in the evening, since the price still did not reach the nearest target level. As a result, a small profit, but given the strong macroeconomic background on Friday, this is a good result.
How to trade on Monday:
The upward trend is formally canceled on the 30-minute timeframe, however, the pair continues to remain close to its local peaks. More important now is the fact that the pair is near the level of 1.2477, from which there was already a rebound this week. Overcoming this level will provoke a new decline for the pound. On the 5-minute TF, it is recommended to trade at the levels 1.2371, 1.2471-1.2477, 1.2559, 1.2597-1.2616, 1.2659-1.2674. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. There are no interesting events planned for the UK and America. In the analysis of the euro/dollar pair, we indicated that a reaction to the NonFarm Payrolls report of the European market is possible. This judgment holds true for the pound as well, despite its 70-point drop since this report was released on Friday. However, novice traders will have nothing to react to on Monday.
