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On Monday, the GBP/USD pair also traded lower despite the absence of any specific reasons or catalysts. Nevertheless, the British currency fell for the third time to the 1.2980 level, near the psychological mark of 1.3000. This indicates a clear desire by the market to establish a position below this level and continue declining. This process might be more complex than simply breaking below the 1.3000 level and then plunging further. The price could break through this level, enter a correction, consolidate above the trendline, and only then resume its decline. However, the bearish sentiment in the market is undeniable. On Monday, no significant or noteworthy events occurred in the UK or the US. Today, no such events are expected either. The price could bounce off the 1.2980 level for the third time but may make a fourth attempt to break through this level.
Only one trading signal was formed in the 5-minute time frame on Monday. At the very start of the European trading session, the price broke through the 1.3043 level, after which it dropped back into the 1.2980-1.2993 area. Thus, novice traders could open a single sell trade, yielding a profit of around 50 pips. We would not recommend trading on a rebound from the 1.2980-1.2993 area.
In the hourly time frame, the GBP/USD pair broke the upward trend and continued to decline. We fully support the pair's decline in the medium term, as we believe it is the only logical direction. The pound may attempt to correct in the near future, but to confirm this, the price would need to consolidate above the trendline. In any case, current volatility is low, so expecting a strong and rapid rise is unrealistic.
The pair could continue its downward movement on Tuesday, as the trendline has not been broken. As long as the price remains below the trendline, discussing buy opportunities is irrelevant. Even in that scenario, any upward movement would only be a correction.
In the 5-minute time frame, trading can currently be conducted around the levels of 1.2848-1.2860, 1.2913, 1.2980-1.2993, 1.3043, 1.3102-1.3107, 1.3145-1.3167, 1.3225, 1.3272, 1.3365, 1.3428-1.3440. No significant events are scheduled in the UK or the US on Tuesday. As a result, volatility may remain low, but traders still have enough technical reference points to trade based solely on them.
Support and Resistance Price Levels: These levels serve as targets when opening buy or sell positions. They can also be used as points to set Take Profit levels.
Red Lines: These represent channels or trend lines that display the current trend and indicate the preferred trading direction.
MACD Indicator (14,22,3): The histogram and signal line serve as a supplementary indicator that can also be used as a source of trading signals.
Important Speeches and Reports (always found in the news calendar) can significantly impact the movement of a currency pair. Therefore, trading should be done with maximum caution during their release, or you may choose to exit the market to avoid a sharp price reversal against the preceding movement.
For Beginners Trading on the Forex Market: It's essential to remember that not every trade will be profitable. Developing a clear strategy and practicing money management is key to achieving long-term success in trading.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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