How to trade GBP/USD on December 26. Simple trading tips and analysis for beginners

GBP/USD kept the downtrend on Friday, which is shown by the descending trend line, but the pair moved mainly sideways. The macro data from the United States did not have much impact on the pair's movement and the market sentiment, and the volatility of the day was 70 pips, which is very low for GBP. Therefore, in fact, there is nothing to analyze on the last trading day of the week. The most important thing is that the pair is showing at least some kind of trend movement, rather than just standing in one place. The pound may continue to sluggishly fall next week, but it is necessary to cross 1.2008. Generally, I expect the pound to fall since it has grown too much and unreasonably at that for the last month. I expect the same thing from the euro, but it prefers a flat trend for now.

There were three trade signals on the 5-minute chart, all three were near the 1.2064-1.2079 area, which is a sign of flat. However, it was clear that the pair was in the flat even without that. The price could not even go down 20 pips after the first sell signal, afterwards it returned to the specified area. The second time it was 20 pips down, so novice traders had to place the Stop Loss to Breakeven, which was used to close the position. The third signal was formed quite late, so it should not be used. As a result, traders did not get any profit or loss on Friday.

On the 30-minute time chart, GBP continues a downward movement. There is a trend movement and it is still possible to make profit from it. Volatility has already begun to decline significantly, the situation may become even worse. GBP may follow the EUR's example and go flat. On the 5-minute chart, it is recommended to trade at the levels 1.1793, 1.1863-1.1877, 1.1950-1.1957, 1.2008, 1.2064-1.2079, 1.2141, 1.2186-1.2205, 1.2245-1.2260. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. There are no important events or reports in the UK or US on Monday. Thus, there will be nothing to react, the probability of a flat is even higher.

1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.

2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored.

3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.

4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.

5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.

Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now.

The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines).

Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.