Trading plan for GBP/USD on April 11. Simple tips for beginners
April 11, 2024 7:23 am
Analyzing Wednesday’s trades:
GBP/USD on 1H chart
The GBP/USD pair also experienced a sharp decline on Wednesday, which was triggered solely by the US inflation report. The Consumer Price Index rose to 3.5% against forecasts of 3.4%. However, another aspect is crucial. Inflation has been rising steadily for several months, while members of the Federal Reserve’s monetary committee talk about decent progress in reducing consumer prices. In other words, the indicator accelerated again at a time when everyone expected it to slow down. And since it hasn’t slowed down, the Fed has no grounds to start a monetary easing cycle. Not now, not in June, not in September. Since the beginning of 2024, the market has been waiting for this, and based on its expectations, it refuses to buy the dollar. As we can see, most market participants were greatly mistaken in their assessments.
Although the pound fell by 200 pips, it still remains within the sideways channel of 1.25-1.28. Therefore, a rebound from the lower boundary of the channel and the beginning of a new unwarranted rise could occur as early as today. However, if the price surpasses the level of 1.2502,GBP/USD may finally start the long-awaited global downward trend.
GBP/USD on 5M chart
Numerous signals were generated on the 5-minute timeframe. The first buy signal should have been closed manually before the release of the CPI data, as the pair firmly fell after this report. It was impossible to react immediately to the pair’s decline, so beginners couldn’t quickly enter the market with short positions near the level of 1.2691. But wherever the shorts were opened, they still brought good profits, as the downward movement amounted to around 200 pips.
Trading tips on Thursday:
On the hourly chart, the GBP/USD pair plummeted, but the 24-hour timeframe still maintains a flat trend. Unfortunately, the market doesn’t always trade in a logical manner, so we cannot rule out the possibility of a new upward movement within the sideways channel starting today. Therefore, in the coming weeks, we can expect the pair to rise towards the 1.2800 level, but if we can confirm that the price has firmly breached the 1.2502 level, this will indicate a possible end to the flat trend.
On Thursday, novice traders can look for buy signals above the level of 1.2502 and sell signals below this level. It’s hard to say whether the market is ready to break the pair out of the 4-month sideways channel.
The key levels on the 5M chart are 1.2372-1.2387, 1.2457, 1.2502, 1.2544, 1.2605-1.2611, 1.2648, 1.2691, 1.2725, 1.2787-1.2791, 1.2848-1.2860, 1.2913, 1.2981-1.2993. Today, there are no important events scheduled in the UK. Moving forward, the US will only publish minor reports on unemployment claims and producer prices.
Basic trading rules:
1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.
2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.
3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.
4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, after which all open trades should be manually closed.
5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.
6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.
How to read charts:
Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.
Red lines represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.
The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.
Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.
Beginners should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.
The material has been provided by InstaForex Company – www.instaforex.com
Analyzing Wednesday’s trades:
GBP/USD on 1H chart
The GBP/USD pair also experienced a sharp decline on Wednesday, which was triggered solely by the US inflation report. The Consumer Price Index rose to 3.5% against forecasts of 3.4%. However, another aspect is crucial. Inflation has been rising steadily for several months, while members of the Federal Reserve’s monetary committee talk about decent progress in reducing consumer prices. In other words, the indicator accelerated again at a time when everyone expected it to slow down. And since it hasn’t slowed down, the Fed has no grounds to start a monetary easing cycle. Not now, not in June, not in September. Since the beginning of 2024, the market has been waiting for this, and based on its expectations, it refuses to buy the dollar. As we can see, most market participants were greatly mistaken in their assessments.
Although the pound fell by 200 pips, it still remains within the sideways channel of 1.25-1.28. Therefore, a rebound from the lower boundary of the channel and the beginning of a new unwarranted rise could occur as early as today. However, if the price surpasses the level of 1.2502,GBP/USD may finally start the long-awaited global downward trend.
GBP/USD on 5M chart
Numerous signals were generated on the 5-minute timeframe. The first buy signal should have been closed manually before the release of the CPI data, as the pair firmly fell after this report. It was impossible to react immediately to the pair’s decline, so beginners couldn’t quickly enter the market with short positions near the level of 1.2691. But wherever the shorts were opened, they still brought good profits, as the downward movement amounted to around 200 pips.
Trading tips on Thursday:
On the hourly chart, the GBP/USD pair plummeted, but the 24-hour timeframe still maintains a flat trend. Unfortunately, the market doesn’t always trade in a logical manner, so we cannot rule out the possibility of a new upward movement within the sideways channel starting today. Therefore, in the coming weeks, we can expect the pair to rise towards the 1.2800 level, but if we can confirm that the price has firmly breached the 1.2502 level, this will indicate a possible end to the flat trend.
On Thursday, novice traders can look for buy signals above the level of 1.2502 and sell signals below this level. It’s hard to say whether the market is ready to break the pair out of the 4-month sideways channel.
The key levels on the 5M chart are 1.2372-1.2387, 1.2457, 1.2502, 1.2544, 1.2605-1.2611, 1.2648, 1.2691, 1.2725, 1.2787-1.2791, 1.2848-1.2860, 1.2913, 1.2981-1.2993. Today, there are no important events scheduled in the UK. Moving forward, the US will only publish minor reports on unemployment claims and producer prices.
Basic trading rules:
1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.
2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.
3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.
4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, after which all open trades should be manually closed.
5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.
6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.
How to read charts:
Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.
Red lines represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.
The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.
Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.
Beginners should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.
The material has been provided by InstaForex Company – www.instaforex.com
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