See also
On Tuesday, the GBP/USD pair continued to trade with minimal gains and broke above the descending trendline. However, this doesn't necessarily mean a strong upward movement will follow, just like the euro. The correction might be weak and sluggish, and with significant U.S. data set to be released this week, the market could resume buying dollars regardless of the trendline breach. So far, we see a complete lack of interest in buying the pound, which is understandable given the extended period it rose based on just one factor. Therefore, we're cautious about drawing conclusions at this point. Important data from the U.S. will start being released today, with Thursday and Friday potentially bringing intense news and volatility.
In the 5-minute timeframe, the pair crawled upward throughout Tuesday. At a certain point, it encountered the 1.2980-1.2993 area but failed to form a decisive bounce or apparent breakthrough. Volatility was low, and a rise in the British currency is currently less of a priority than a potential new decline.
In the hourly time frame, the GBP/USD pair broke the upward trend and continued to fall. We fully support the pound's decline in the medium term, as it seems like the only logical outcome. The pound may attempt a correction soon, but for this to happen, most U.S. reports this week would need to be weak. The pound currently has no solid grounds for growth, so a strong upward movement is unlikely.
The pair may continue a slow correction on Wednesday, but the macroeconomic background will determine the last three days of the week.
In the 5-minute time frame, you can trade based on 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 or reports are scheduled in the UK for Wednesday, while in the U.S., the ADP private sector employment report and the preliminary Q3 GDP estimate will be released.
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.