20.01.202607:07 Forex Analysis & Reviews: How to trade the GBP/USD currency pair on January 20? Simple tips and trade review for beginners

Review of Monday's trades:

1H chart of the GBP/USD pair

The GBP/USD pair also traded higher on Monday, breaking above the descending trendline. Thus, the trend for both the euro and the pound reversed simultaneously and in sync. This is very positive, since both currencies are still "looking" in the same direction. As for the reasons for the dollar's decline at the start of the new week, there is no need to look far. Donald Trump began the new week by announcing 10% tariffs on eight EU countries and the United Kingdom, which do not support his voluntary annexation of Greenland. According to Trump, the tariffs will remain in force until America buys the island. Subsequently, the tariffs may rise to 25%, and any previously signed trade agreements will not matter. We had already expected only weakness for the US dollar, and in 2026, that expectation becomes even easier.

5M chart of the GBP/USD pair

On the 5-minute TF, no trading signals were formed on Monday, although the intraday movement was very attractive. Only at the market open on Monday did the price come within arm's reach of the 1.3319–1.3331 area, but it did not work off that zone. Thus, novice traders had no grounds to enter the market.

How to trade on Tuesday:

On the hourly TF, the GBP/USD pair has turned north, so in the coming weeks, one can expect the British pound to rise. There are no global factors that would lead the dollar to strengthen in the medium term, so in 2026, we expect only upside movement. Overall, we expect the global uptrend to resume from 2025, potentially bringing the pair to 1.4000 within the next couple of months. Donald Trump's policy still does not imply a strengthening US currency.

On Tuesday, novice traders may consider short positions if the pair bounces off the 1.3437–1.3446 area with a target of 1.3319–1.3331. Consolidation above the 1.3437–1.3446 area will allow opening long positions targeting 1.3529–1.3543.

On the 5-minute TF, you can trade the levels 1.3043, 1.3096–1.3107, 1.3203–1.3212, 1.3259–1.3267, 1.3319–1.3331, 1.3437–1.3446, 1.3529–1.3543, 1.3574–1.3590, 1.3643–1.3652, 1.3682, 1.3763. On Tuesday, the UK will publish interesting but not top-tier reports on unemployment, claimant counts, and wages. The US calendar is empty today. The pair's volatility is likely to remain low again, but a rise in the pound can be expected.

Main rules of the trading system:

1. Signal strength is judged by the time required to form the signal (rebound or breakout). The less time required, the stronger the signal.
2. If two or more trades were opened on false signals near a level, then all subsequent signals from that level should be ignored.
3. In a flat, any pair can generate many false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
4. Trades are opened between the start of the European session and the middle of the American session; after that, all trades must be closed manually.
5. On the hourly timeframe, MACD-based signals should be traded only when there is good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are located too close to each other (5–20 pips), they should be considered a support or resistance area.
7. After the price moves 20 pips in the correct direction, set the stop loss to breakeven.

What is shown on the charts:

Support and resistance price levels — levels that serve as targets when opening buys or sells. Take Profit can be placed near them.

Red lines — channels or trendlines that reflect the current tendency and show which direction is preferable to trade now.

MACD indicator (14,22,3) — histogram and signal line — an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always listed in the news calendar) can strongly affect a currency pair's movement. Therefore, during their release, trading should be done with maximum caution, or positions should be closed, to avoid a sharp price reversal against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.