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On Friday, the GBP/USD pair traded lower, although it barely declined by the end of the day. However, Friday's movements hold little significance for the pound. Firstly, the price remains below the trendline, so there is no reason to assume that an upward correction has started. Secondly, in the medium term, we expect only declines in the British currency. Lastly, the pound had no macroeconomic support to rally this week. The only reports from the UK were on business activity, which came in weaker than forecast. Moreover, the Bank of England's prospects of a quick rate cut add no optimism for pound buyers.
In the 5-minute time frame, there was only one trading signal on Friday. During the U.S. session, the price rebounded from the 1.2980-1.2993. Was it worth acting on this signal so close to the market close? That's up to the trader's discretion. A Stop Loss could have been set to breakeven before the market closed, allowing for a calm weekend.
In the hourly time frame, the GBP/USD pair has broken the uptrend and continues to decline. In the medium term, we fully support the pound's decline, as this seems to be the most likely scenario. The pound might attempt a correction soon but must break above the trendline to confirm this. Currently, the pound has no grounds for growth, so expecting a solid upward move is unlikely.
The pair may resume its downtrend on Monday, as the trendline has not been broken. Until the price surpasses the trendline, buying is not advisable. And even in that case, it would only indicate a correction.
In the 5-minute time frame, trading can be conducted around the levels 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, and 1.3428-1.3440. No significant events are scheduled for Monday in the UK or the U.S., so we're likely in for low volatility and sluggish movements.
Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed around these areas.
Red Lines: Channels or trend lines that indicate the current trend and the preferred trading direction.
MACD Indicator (14,22,3): Histogram and signal line—an auxiliary indicator that can also be used as a source of signals.
Major speeches and reports (always found in the news calendar) can significantly impact currency pair movements. Therefore, it's advised to trade cautiously or exit the market during their release to avoid sharp price reversals against prior movements.
Beginners trading on the forex market should remember that not every trade will be profitable. A clear strategy and money management are the keys to success in long-term 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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