20.10.202604:26 Analisis Forex & Kajian: How to Trade The GBP/USD Currency Pair on October 20? Simple Tips and Trade Analysis for Beginners

Review of Monday's trades:

1H chart of the GBP/USD pair

GBP/USD showed no notable intraday moves on Monday. During the day, sterling eased slightly after bouncing off the trendline, but we believe the trendline will be breached. Remember that technical signals currently matter more for the pound than fundamentals or macro releases. On the daily and weekly timeframes, price cleared liquidity at recent lows and bounced from the lower edges of two sideways channels. The hourly chart shows the same picture. In other words, the pound rebounded off three channel boundaries, so it can now head at least toward 1.3650—or higher—since the global uptrend that began in 2022 remains intact. No major UK or US events hit on Monday, so news isn't the priority for sterling right now. The market spent a month buying the dollar; now the pound can rise, at least within its channels. From our point of view, this move does not require fundamental or macro support.

5M chart of the GBP/USD pair

On the 5-minute chart, Monday produced two trading signals. Price bounced twice from the 1.3319–1.3331 area but could not move significantly lower. The signals duplicated each other, so novice traders could realistically take only one short position. At the moment, price has returned to the signal-formation point.

How to trade on Tuesday:

On the hourly timeframe, GBP/USD has a good chance of completing the month-long downtrend. The pound has shown notable resilience against the dollar in recent weeks and now has strong odds of entering an uptrend. The technical picture across charts supports a move higher for the British currency. Fundamentals, macro context and an overbought dollar also back GBP/USD gains.

On Tuesday, novice traders may consider short positions targeting 1.3259–1.3267 if price rebounds for a third time this week from the 1.3319–1.3331 area. Consider long positions targeting 1.3380–1.3386 if price closes above the 1.3319–1.3331 area.

On the 5-minute timeframe trade these levels: 1.3043, 1.3096–1.3107, 1.3175–1.3180, 1.3259–1.3267, 1.3319–1.3331, 1.3380–1.3386, 1.3456–1.3476, 1.3587–1.3598, 1.3631–1.3641. On Tuesday, the UK will publish relatively important labour-market releases on unemployment and wages. In the US, housing starts and building permits are due — but those US releases are secondary.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (rebound or breakout). The less time taken, the stronger the signal.
2. If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be acted upon only when volatility is high, and a trend line or trend channel confirms the trend.
5. If two levels are too close together (within 5-20 pips), treat them as a support or resistance area.
6. After moving 15 pips in the right direction, a stop-loss should be set to break even.

What to Look for on the Charts:

Price levels (areas) of support and resistance serve as targets for opening buy or sell trades or as sources of signals.

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

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also provide signals.

Important speeches and reports (listed in the news calendar) can significantly influence currency pair movements. Therefore, during their release, traders should approach trading with utmost caution, or exit the market to avoid sudden reversals against the preceding move.

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