empty
18.09.2024 07:05 AM
How to Trade the GBP/USD Pair on September 18? Simple Tips and Trade Analysis for Beginners

Analysis of Tuesday's Trades:

GBP/USD on 1H Chart

This image is no longer relevant

The GBP/USD pair tested the 1.3225 level again on Tuesday but failed to break through it and subsequently pulled back. We believe the pair's decline was triggered by this rebound, especially since the descending trendline also runs around the 1.3225 level. Therefore, we can still conclude that the downtrend remains intact for now. However, the British pound has been rising persistently in the past few days without any grounds or reasons. How the market will react to the Federal Reserve's evening meeting remains a big question. We certainly support a further decline in the British currency, which remains overbought and excessively expensive, but the market may continue to price in the Fed's monetary easing for some time. All other factors seem to be of little interest to it.

GBP/USD on 5M Chart

This image is no longer relevant

In the 5-minute time frame on Tuesday, two sell signals were generated around the 1.3225 level. Unlike the euro's signal, the signals for the pound were very accurate and of high quality. Therefore, novice traders had a good opportunity to open short positions. The pair then precisely worked through the 1.3145-1.3167 area, where short positions could have been closed. The profit amounted to around 60 pips.

How to Trade on Wednesday:

In the hourly time frame, GBP/USD has a good chance of resuming the global downtrend or undergoing a significant correction, but we haven't seen either. The British pound remains overbought, the dollar is undervalued, and the market is still much more inclined to sell the dollar than to buy it. So far, the pound has only slightly corrected downward. It is still too early to talk about a full-fledged downtrend. If the price breaks through the 1.3225 level, it will further reduce the dollar's chances of growth in the near future.

On Wednesday, the pair may attempt to resume its decline, as it has failed twice to break through the 1.3225 level. However, if it consolidates above this level, we can expect further growth of the British currency.

In the 5-minute time frame, you can currently trade around the levels of 1.2748, 1.2791-1.2798, 1.2848-1.2860, 1.2913, 1.2980-1.2993, 1.3043, 1.3102-1.3107, 1.3145-1.3167, 1.3225, 1.3272, 1.3310, 1.3365. No significant events are scheduled in the UK for Wednesday, while in the U.S., reports on new home sales and building permits will be released. We do not expect a reaction of more than 20 pips from this data. All attention is on the Fed meeting.

Basic Rules of the Trading System:

1) The strength of a signal is determined by the time it takes for the signal to form (bounce or level breakthrough). The less time it took, the stronger the signal.

2) If two or more trades were opened around any level due to false signals, subsequent signals from that level should be ignored.

3) In a flat market, any currency pair can form multiple false signals or none at all. In any case, it's better to stop trading at the first signs of a flat market.

4) Trades should be opened between the start of the European session and midway through the U.S. session. After this period, all trades must be closed manually.

5) In the hourly time frame, trades based on MACD signals are only advisable amidst good volatility and a trend confirmed by a trendline or trend channel.

6) If two levels are too close to each other (5 to 20 pips), they should be considered a support or resistance area.

7) After moving 20 pips in the intended direction, the Stop Loss should be set to break even.

What's on the Charts:

Support and Resistance price levels: targets for opening long or short positions. You can place Take Profit levels around them.

Red lines: channels or trend lines that depict the current trend and indicate the preferred trading direction.

The MACD indicator (14,22,3): encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a source of signals.

Important speeches and reports (always noted in the news calendar) can profoundly influence the movement of a currency pair. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to avoid sharp price reversals against the prevailing movement.

For beginners, it's important to remember that not every trade will yield profit. Developing a clear strategy and effective money management is key to success in trading over the long term.

Paolo Greco,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

GBP/USD: Trading Plan for the U.S. Session on January 21st (Review of Morning Trades)

In my morning forecast, I focused on the level of 1.2249 and planned to make trading decisions from there. Let's analyze the 5-minute chart to see what happened. A decline

Miroslaw Bawulski 14:34 2025-01-21 UTC+2

EUR/USD: Trading Plan for the U.S. Session on January 21st (Review of Morning Trades)

In my morning forecast, I focused on the level of 1.0356 and planned to make trading decisions from there. Let's look at the 5-minute chart and analyze what happened

Miroslaw Bawulski 14:26 2025-01-21 UTC+2

How to Trade the GBP/USD Pair on January 21? Simple Tips and Trade Analysis for Beginners

Analysis of Monday's Trades 1H Chart of GBP/USD On Monday, the GBP/USD pair demonstrated significant growth. However, let's take a closer look at the hourly timeframe—can we conclude that

Paolo Greco 06:36 2025-01-21 UTC+2

How to Trade the EUR/USD Pair on January 21? Simple Tips and Trade Analysis for Beginners

Analysis of Monday's Trades 1H Chart of EUR/USD On Monday, the EUR/USD currency pair exhibited a sharp and strong rise. The euro began to strengthen almost immediately after the market

Paolo Greco 06:36 2025-01-21 UTC+2

Trading Recommendations and Analysis for GBP/USD on January 21: The Pound Didn't Stand Aside

On Monday, the GBP/USD currency pair experienced a significant rise. The factors influencing this movement are similar to those discussed in the EUR/USD article. Surprisingly, there were no specific reasons

Paolo Greco 02:57 2025-01-21 UTC+2

Trading Recommendations and Analysis for EUR/USD on January 21: Rapid Growth and... a Swift Decline?

The EUR/USD currency pair saw a rapid increase of nearly 200 pips on Monday. There were no fundamental reasons for such a movement; the market reacted unexpectedly to Trump's inauguration

Paolo Greco 02:57 2025-01-21 UTC+2

GBP/USD: Plan for the American Session on January 20 (Review of Morning Trades). The Pound Faces Continued Challenges

In my morning forecast, I highlighted the 1.2162 level as a key decision point for market entry. Let's analyze the 5-minute chart to see what transpired. A decline

Miroslaw Bawulski 14:15 2025-01-20 UTC+2

EUR/USD: Trading Plan for the U.S. Session on January 20th (Review of Morning Trades)

In my morning forecast, I highlighted the 1.0322 level as a key decision point for market entry. Let's look at the 5-minute chart to see what happened. The rise

Miroslaw Bawulski 14:01 2025-01-20 UTC+2

Margin Zones and Trading Ideas for S&P 500 and NASDAQ (January 20, 2025 - January 24, 2025)

Long-Term Trend: Temporary uncertainty. For buying opportunities, wait for a zig-zag pattern and a breakout above 6099.43. For selling opportunities, wait for a zig-zag pattern and a breakout below 5790.81

08:32 2025-01-20 UTC+2

Trading Recommendations and Analysis for GBP/USD on January 20: The Pound Targets 1.1800 Again

The GBP/USD currency pair continued its downward trend on Friday. While a weak upward correction was observed on the hourly timeframe, the British pound is gradually sliding towards its lowest

Paolo Greco 02:56 2025-01-20 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.