Trading plan for GBP/USD on July 3. Simple tips for beginners
July 3, 2023 4:22 am
Analyzing Friday’s trades:
GBP/USD on 30M chart
The GBP/USD pair also showed some bullish bias on Friday. In the case of the EUR/USD pair, the movement could be partially attributed to the disappointing report on core inflation, which may have prompted the euro’s rise due to increased market expectations regarding the ECB rate. However, in the pound’s case, we don’t know why this happened since the eurozone inflation report has no relation to the pound. We could speculate that the euro influenced the pound’s upward movement, but the pound actually appreciated more than the euro. In the UK, the final estimate of the GDP report for the first quarter was released on Friday, which could not have triggered a sharp rise in the pound.
The US reports, which did not include any significant ones, also could not have weighed on the dollar. Among them were the Personal Consumption Expenditures (PCE) Price Index, Personal Income and Outlays, and the University of Michigan Consumer Sentiment Index. The actual values of these reports almost entirely matched the forecasts, and the dollar started to fall during the European session. Therefore, we are inclined to believe that macro data had no influence here, and the market was biased towards buying from the morning onwards.
GBP/USD on 5M chart
Speaking of trading signals, they were quite interesting on the 5-minute chart. During the European trading session, the pair rebounded from the 1.2597-1.2605 area and then began a prolonged upward movement, climbing above the 1.2690 level by the end of the day, surpassing another level at 1.2653 along the way. As a result, novice traders could only open one trade on Friday, which would be a buy position. Profit should have been manually taken closer to the evening, above the 1.2690 level. The profit amounted to at least 85 pips.
Trading tips on Monday:
As seen on the 30M chart, the pair has been falling for ten trading days. We have formed a new descending channel, and the price is currently near the upper band of the channel. We believe that the pound still lacks strong reasons to rise, so a bounce from this boundary and a resumption of the decline would be more logical. However, if the price consolidates above the channel, this would indicate a shift to an uptrend. The key levels on the 5M chart are 1.2457, 1.2499, 1.2538, 1.2597-1.2605, 1.2653, 1.2690, 1.2757, 1.2801, 1.2860, 1.2913, 1.2981. When the price moves 20 pips in the right direction after opening a trade, a stop loss can be set at breakeven. On Monday, PMIs in the manufacturing sector will be published in the UK and the US. Except for the ISM report in the US, all other reports will be second estimates for June, so this should be sufficient to stir some market reaction.
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
Analyzing Friday’s trades:
GBP/USD on 30M chart
The GBP/USD pair also showed some bullish bias on Friday. In the case of the EUR/USD pair, the movement could be partially attributed to the disappointing report on core inflation, which may have prompted the euro’s rise due to increased market expectations regarding the ECB rate. However, in the pound’s case, we don’t know why this happened since the eurozone inflation report has no relation to the pound. We could speculate that the euro influenced the pound’s upward movement, but the pound actually appreciated more than the euro. In the UK, the final estimate of the GDP report for the first quarter was released on Friday, which could not have triggered a sharp rise in the pound.
The US reports, which did not include any significant ones, also could not have weighed on the dollar. Among them were the Personal Consumption Expenditures (PCE) Price Index, Personal Income and Outlays, and the University of Michigan Consumer Sentiment Index. The actual values of these reports almost entirely matched the forecasts, and the dollar started to fall during the European session. Therefore, we are inclined to believe that macro data had no influence here, and the market was biased towards buying from the morning onwards.
GBP/USD on 5M chart
Speaking of trading signals, they were quite interesting on the 5-minute chart. During the European trading session, the pair rebounded from the 1.2597-1.2605 area and then began a prolonged upward movement, climbing above the 1.2690 level by the end of the day, surpassing another level at 1.2653 along the way. As a result, novice traders could only open one trade on Friday, which would be a buy position. Profit should have been manually taken closer to the evening, above the 1.2690 level. The profit amounted to at least 85 pips.
Trading tips on Monday:
As seen on the 30M chart, the pair has been falling for ten trading days. We have formed a new descending channel, and the price is currently near the upper band of the channel. We believe that the pound still lacks strong reasons to rise, so a bounce from this boundary and a resumption of the decline would be more logical. However, if the price consolidates above the channel, this would indicate a shift to an uptrend. The key levels on the 5M chart are 1.2457, 1.2499, 1.2538, 1.2597-1.2605, 1.2653, 1.2690, 1.2757, 1.2801, 1.2860, 1.2913, 1.2981. When the price moves 20 pips in the right direction after opening a trade, a stop loss can be set at breakeven. On Monday, PMIs in the manufacturing sector will be published in the UK and the US. Except for the ISM report in the US, all other reports will be second estimates for June, so this should be sufficient to stir some market reaction.
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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