October 18, 2021

How to trade the GBP/USD currency pair on October 18? Simple tips for beginners. The pound also continues to stay inside the side channel.

 The GBP/USD pair on the 30-minute timeframe on Friday, unlike the euro, continued the upward movement that began a few days ago. An ascending trend line was even formed yesterday, so we can try to consider signals from the MACD indicator in the next few days. Recall that for their formation, the indicator must be as close as possible to the zero level. Also, a possible rebound from the trend line can be considered as an indicator for buying. The volatility of the pound/dollar pair in recent days is also not bad. Thus, it is possible to trade at this time. The main thing is that strong signals are formed. On Friday, as for macroeconomic statistics, there was only the same report on retail sales in the United States and the consumer confidence index from the University of Michigan. The illustration below clearly shows that there was no reaction to these reports. The pair has been moving up almost all day.

On a 5-minute timeframe, the picture is much more complicated and requires detailed analysis. There were a lot of trading signals for the pound on Friday. Let's try to figure out how to trade on the last trading day of the week. The first buy signal was formed near the 1.3688 and 1.3692 buy levels. After its formation, the price managed to rise to the level of 1.3734, from which a rebound followed. Therefore, the long position should have been closed manually near the level of 1.3734. The Profit on the transaction was about 26 points. On the rebound from the level of 1.3734, it was necessary to open a short position, but this signal was false. The price bounced twice from the 1.3734 level but eventually overcame this level. Therefore, a loss of 15 points was received. Then the movements became very complicated. Since the 1.3749 level was located 15 points above the 1.3749 level, opening purchase transactions was unnecessary. The same applies to the next level of 1.3764, to which there were also 15 points. All subsequent signals were formed near these levels, so they should not have been worked out. As a result, the day was completed with minimal Profit.

How to trade on Monday:

At this time, an upward trend has formed on the 30-minute timeframe, and volatility has increased. Thus, in the coming days, you can consider the signals from the MACD indicator to buy. On Monday, you can wait until the indicator itself discharges to zero, and the price will adjust down a little more. On a 5-minute timeframe, the important levels are 1.3688, 1.3692, 1.3734, 1.3749, 1.3733, 1.3796. We recommend trading on them on Monday. The price can rebound from them or overcome them. As before, we set Take Profit at a distance of 40-50 points. On the 5TH TF, you can use all the nearest levels as targets, but then you need to fix the Profit, taking into account the movement's strength. When passing 20 points in the right direction, we recommend setting the Stop Loss to breakeven. On Monday, the day's only event will be the macroeconomic report on industrial production in the United States. However, it is unlikely that it will provoke at least some reaction from traders.