GBP/USD 5M Analysis: Navigating a Minor Downward Correction and Volatility

Analysis of GBP/USD 5M

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GBP/USD also experienced a minor downward correction on Wednesday, while overall volatility reached 100 pips. This is already something to talk about. Unfortunately, during the European session, movements left much to be desired. In general, we witnessed a flat, and the pair only started to move normally during the U.S. session when three more or less significant reports were published in America.

As we mentioned before, reports on durable goods orders and the University of Michigan's consumer sentiment turned out to be weaker than expected. However, the third report on initial jobless claims was better than the market's expectations. In our opinion, one positive report could not outweigh two negatives, so we believe that the British pound fell on Wednesday due to the pair's overbought condition. Speaking of trading signals, the flat condition during the European session did not bring any profit.

During the first half of the day, four signals were formed around the level of 1.2520, and they were all false signals because the pair, essentially, stood still. Therefore, when the fifth signal was formed around the level of 1.2520 during the U.S. session, it should not have been executed. And the best movement of the day began at this time. Traders could open 1-2 trades in the morning, incurring a small loss, and could then work out the rebound from the level of 1.2445, which allowed them to offset this loss. However, there was no substantial profit.