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15.02.202405:05 Forex Analysis & Reviews: Trading plan for GBP/USD on February 15. Simple tips for beginners

Analyzing Wednesday's trades:

GBP/USD on 1H chart

Exchange Rates 15.02.2024 analysis

GBP/USD continued to trade lower on Wednesday. If on Tuesday, the reason for selling the British currency was the U.S. inflation report, then on Wednesday, it was the UK inflation report. The UK Consumer Price Index for January remained unchanged, although it was expected to rise to 4.2%. Core inflation also remained unchanged, despite expectations of an acceleration to 5.2%. Thus, the results of this report turned out to be more dovish than expected, and the British currency continued to decline.

We do not believe that this report will radically affect the mood of the Monetary Policy Committee, but it is worth noting that the longer inflation grows or does not decrease, the longer the Bank of England will leave the rate at the current level. However, at the same time, it is important to remember that comparisons should be made between forecasts and actual values, not between previous and actual values.

GBP/USD on 5M chart

Exchange Rates 15.02.2024 analysis

The movements on the 5-minute timeframe were volatile enough for us to expect signals and profit. During the European trading session, a sell signal was formed around 1.2605-1.2611. It was quite difficult to catch it, but it was still possible to enter the market. Subsequently, the pair dropped to the level of 1.2544 and bounced off it twice, forming buy signals. These two signals duplicated each other, so only one long position should have been opened based on them. Market participants could close this trade on Wednesday evening. Overall, the profit from the two trades was 40-50 pips.

Trading tips on Thursday:

On the hourly chart, GBP/USD left the sideways channel of 1.2611-1.2787 and is making every effort to start a downtrend. However, the pound recently declined due to strong reports. In the future, the market may go back to buying for no good reason. If Thursday's UK data turn out to be better than expected, the pound may show strong growth.

The key levels on the 5M chart are 1.2270, 1.2310, 1.2372-1.2387, 1.2457, 1.2502, 1.2544, 1.2605-1.2611, 1.2688, 1.2725, 1.2787-1.2791, 1.2848-1.2860, 1.2913, 1.2981-1.2993. On Thursday, the UK will release reports on industrial production and GDP. The forecasts are weak, but if the latest values exceed them, this can push the pound higher. The U.S. will release secondary reports, such as industrial production and retail sales, which can provoke a market reaction only in the case of a significant deviation of the actual value from the forecast.

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.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Paolo Greco,
Analytical expert of InstaSpot
© 2007-2024
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