Analyzing Friday's trades:
GBP/USD on 30M chart
The GBP/USD pair also traded higher on Friday, based on the same economic reports from across the ocean. In the article on the euro currency, we briefly discussed the NonFarm Payrolls and unemployment reports; now let's look at them a bit more closely. So, at the end of June, the number of new jobs created amounted to 209,000, which is slightly lower than forecasts. However, the May Nonfarm value was revised downwards to 306,000, not 339,000, as announced a month ago. It would seem that the last two reports were worse, only the May forecasts were at the level of 190,000, which were exceeded in any case. And any value above 200,000 can generally be considered positive. Especially, considering the current size of the Federal Reserve's rate.
The unemployment rate fell again and is now 3.6%, but the market did not pay attention to this report. Thus, it turns out that the market worked off the negative, and ignored the positive. Typical market behavior in recent months, especially for the GBP/USD pair. The uptrend persists, now we have an ascending channel.
GBP/USD on 5M chart
The movements during the US session were quite volatile, but we already warned you about this in advance. The first signal was formed during the European session, when the price bounced off the level of 1.2734. Here, beginners could open long positions. Then the sell signal should have been ignored, and traders could even stay in long positions, as the Nonfarm data turned out to be weaker than forecasts, and the trade was already open. They could have set a Stop Loss at break-even and calmly waited for the reports. In the end, the pair grew even stronger, and beginners could earn about 90 points in total from a single deal.
Trading tips on Monday:
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. Therefore, purely technically, GBP may extend its upward movement, but fundamental factors are still very doubtful. The key levels on the 5M chart are 1.2538, 1.2597-1.2605, 1.2653, 1.2688, 1.2734, 1.2779, 1.2801, 1.2860, 1.2913, 1.2981-1.2993. When the price moves 20 pips in the right direction after opening a trade, a stop loss can be set at breakeven. On Monday, Bank of England Governor Andrew Bailey will deliver a speech, which could be very interesting, and speeches by members of the Federal Open Market Committee will also speak, which is less interesting.
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.
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