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Trading plan for GBP/USD on July 13. Simple tips for beginners
July 13, 2023 4:20 amVideo
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Analyzing Wednesday’s trades:
GBP/USD on 30M chart
The GBP/USD pair was also moving higher on Wednesday. However, in the first half of the day, the pair experienced a slight pullback, reaching the 1.2913 level. Then the US inflation report was published, which fueled the dollar’s weakening across the market spectrum. Take note that the pound became even weaker than the euro, although it is usually the other way around. However, the British currency still shows such strong and uncorrected growth that it’s not worth paying attention to such a minor detail. The pound continues to update its annual highs almost every day. It has already grown by 2600 points in 10 months.
The price is also much higher than the ascending channel formed at the beginning of the trend. This means that the upward momentum is not only not fading, but is also strengthening. On Wednesday, the dollar had logical reasons to fall, but it falls very vigorously even on days when there are no reasons. This week, three out of three days ended with a fall in the dollar, although on Tuesday there were weak UK data, and on Monday there was nothing interesting at all.
GBP/USD on 5M chart
In the first half of the day, the pair didn’t stand still, unlike the euro. By the beginning of the US session, it fell to the 1.2913 level, from which it bounced, but the action wasn’t precise or clear. Exactly at the moment when the inflation report was published. It was extremely problematic to enter a long position, the pair jumped. The inflation report was unambiguous (meaning you could open longs), but the pound hardly managed to do it. The upward movement ended in the area of 1.2981-1.2993.
Trading tips on Thursday:
As seen on the 30M chart, the GBP/USD pair continues to form a new uptrend. The pound can still rise even on those days when there is no fundamental background or when it is clearly negative. Therefore, for purely technical reasons, GBP may extend its upward movement, but fundamental factors remain dubious (if we don’t count Wednesday). The key levels on the 5M chart are 1.2653, 1.2688, 1.2748, 1.2779-1.2801, 1.2848-1.2860, 1.2913, 1.2981-1.2993, 1.3043-1.3049, 1.3102. When the price moves 20 pips in the right direction after opening a trade, a stop loss can be set at breakeven. On Thursday, the UK will release data on GDP and industrial production. The GDP data will be monthly, not quarterly, which are of lesser importance. The US will also release reports, but of medium importance: unemployment benefits claims and producer price index.
Basic trading rules:
1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.
2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.
3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.
4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.
5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.
6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.
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 are channels or trend lines that display the current trend and show which direction is better to trade.
MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines.
Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.
Beginners should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.
The material has been provided by InstaForex Company – www.instaforex.com
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