FX.co ★ Analytics and trading signals for beginners. How to trade GBP/USD on December 1? Analysis of Monday deals. Getting ready for Tuesday

Hourly chart of the GBP/USD pair

The GBP/USD pair faced multidirectional trading on Monday, November 30. It is extremely difficult for novice traders to trade this pair right now. Over the past few weeks, quotes have repeatedly overcome rising trend lines and channels, thus breaking the seemingly upward trends, at first glance. However, it went back to moving up. In recent days, the quotes have been tightly stuck between the levels of 1.3397 and 1.3292, i.e. approximately in the stop-point of the horizontal channel. During the day, the pound/dollar pair was trading neatly in the middle of the horizontal channel, changing direction several times. Therefore, there is no trend right now, the horizontal channel is too narrow to look for short-term trends inside it, and the price also manages to move extremely erratically within the day. Therefore, we advise you to be very careful when trading this pair or do not trade it at all.

The fundamentals on Monday were even more confusing than the technical picture. By and large, the trade talks between the EU and the UK is still the key topic. However, both parties have great difficulty moving forward and are constantly on the verge of failure. For example, Michel Barnier said that negotiations could be completed on Wednesday, and British officials believe that everything should be decided this week. Novice traders need to understand the essence of these negotiations. If the trade deal fails, Britain and the EU will trade with duties and tariffs starting on January 1, 2021. Not as two friendly powers, but as countries that see each other for the first time. Naturally, this will negatively affect the volume of imports and exports in both directions, and the fall in these indicators will negatively affect production, business, GDP and the economy as a whole. Both for the European Union and Great Britain. This, of course, will be a much bigger blow for Great Britain than it is for the EU. Therefore, no deal = serious contraction of the British economy and, very likely, a strong fall in the British currency.

The UK Manufacturing Business Activity for November will be released tomorrow. This indicator is expected to remain at 55.2, which is a fairly high value. However, trade negotiations and their results are of much greater importance for the British pound right now, and not business activity. We are still expecting the pound to start falling, just like the European currency. There is practically no important information coming from America at this time.

Possible scenarios for December 1:

1) Traders failed to overcome the 1.3397 level, and so the pair has just been trading in a horizontal channel for a week. Therefore, long deals are irrelevant now. You have to wait for a new upward trend or until the 1.3397 level has been overcome in order to be able to expect the return of the upward trend.

2) Short deals, from our point of view, are more convenient now, and for a number of reasons. The upward trend line has been overcome, the pound has been growing for a long time, the fundamental background is still not in favor of buyers. Therefore, we believe that the downward movement will extend until next week. In order to be able to open short positions, novice traders are advised to wait for the upward correction, afterwards a new sell signal from MACD. Aim for support levels 1.3281 and 1.3242.

On the chart:

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

Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.

The MACD indicator 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 lines (channels and trend lines).

Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.

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