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On Wednesday, the GBP/USD pair continued its relatively weak decline, but the most crucial factor is that the upward trend has been canceled, and the dollar finally has a chance to improve its position. We believe the current decline is very weak and should continue under almost any circumstances. This week, several important reports from the US have supported the US dollar, which hasn't happened for quite some time. However, the market will make its final conclusions based on Friday's unemployment and NonFarm Payrolls reports. These reports will determine the dollar's trend for the coming weeks. It is important to remember that the labor market and its condition are crucial not only as an isolated economic factor but also as a key influence on the Federal Reserve's monetary policy decisions.
In the 5-minute time frame, the pair traded more in a flat range than in a trend on Wednesday. The downtrend remains intact, but the market showed little interest in actively selling the pair yesterday. A similar scenario may unfold today as the market is waiting for the unemployment and labor market reports. Yesterday, trading the first two signals around the 1.3272 level was possible. The first trade could have been closed at break-even since the price moved 20 pips upward. The second short position can still be held since the signal hasn't been canceled, and a further decline in the pound is still more likely.
The GBP/USD pair has broken the upward trend in the hourly time frame. There are no issues with volatility at the moment, so traders can open trades within each trading day rather than just watching minor movements, which could be described as "convulsions." The US dollar has begun its long-awaited rise, but the two-day decline of the pair does not guarantee the formation of a full-fledged downward trend that we are expecting. Therefore, caution should be exercised when selling, and it's important to remember the solid macroeconomic background until the end of the week.
On Thursday, the pound sterling may continue its downward movement, focusing on the 1.3272 level, where two sell signals were formed yesterday.
In the 5-minute timeframe, you can trade at the following levels: 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, 1.3488, 1.3537. On Thursday, service sector business activity indices will be published in the UK and the US in their second estimates. These are secondary reports. The main focus should be on the ISM index in the US.
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 an auxiliary 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.