11.11.202407:11 Forex Analysis & Reviews: How to Trade the GBP/USD Pair on November 11? Simple Tips and Trade Analysis for Beginners

Analysis of Friday's Trades:

1H Chart of GBP/USD Pair

On Friday, the GBP/USD pair also traded lower. Overall, the British pound has been moving sideways for several weeks within the range of 1.2860 to 1.3043. Although this range is quite broad, it is still considered a horizontal channel. The only significant event on Friday was the University of Michigan Consumer Sentiment Index in the U.S., which exceeded the forecast and the previous reading for November. This justified the renewed growth of the U.S. dollar.

However, it's worth noting that the previous week, the dollar showed almost no decline despite the disastrous Nonfarm Payrolls report. This suggests that the market will buy the dollar under macroeconomic conditions. In other words, the dollar rose sharply on the consumer sentiment index than it fell on the disappointing NonFarm Payrolls report. We continue to believe that the dollar will strengthen in the medium term.

5M Chart of GBP/USD Pair

Two solid sell signals were formed on Friday in the 5-minute time frame. The first signal occurred overnight around the 1.2988–1.2993 area. By the time the European trading session opened, the price had barely moved away from the signal level, making it an opportunity to open a short position. During the U.S. session, the price broke below the 1.2913 level, providing a reason to remain in short positions.

How to Trade on Monday:

In the hourly time frame, the GBP/USD pair attempted to start a correction after a month-long decline but failed to do so. Instead, it remained within the flat range of 1.2860 to 1.3043. We fully support the pound's decline as the most logical outcome in the medium term. The British pound may attempt another correction soon, but for that to happen, it would need support, which neither the Federal Reserve nor the Bank of England has provided.

On Monday, novice traders can expect the downward movement to continue. However, the 1.2860 level keeps the pair from falling further, and a rebound from this level could trigger growth.

On the 5-minute TF, it is now possible to trade at 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, 1.3365. Although no significant events are scheduled for Monday in the UK or the US, the pair may still experience notable movements.

Basic Trading System Rules:

1. The strength of a signal is determined by the time it takes to form (whether a bounce or breakthrough of a level). The quicker the formation, the stronger the signal.
2. If two or more trades have been made near a level due to false signals, any further signals from that level should be ignored.
3. In a flat market, a pair can generate many false signals or none at all. In any case, it's best to stop trading at the first signs of a flat market.
4. Trading occurs between the start of the European and middle of the US sessions, after which all trades should be manually closed.
5. On the hourly time frame, it's recommended to trade MACD indicator signals only when there is good volatility and a trendline or trend channel confirms a trend.
6. If two levels are too close together (5 to 20 pips apart), they should be treated as support or resistance areas.
7. After the price moves 20 pips in the intended direction, set the Stop Loss to breakeven.

What's on the Charts:

Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed around these areas.

Red Lines: Channels or trend lines that indicate the current trend and the preferred trading direction.

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

Major speeches and reports (always found in the news calendar) can significantly impact currency pair movements. Therefore, it's advised to trade cautiously or exit the market during their release to avoid sharp price reversals against prior movements.

Beginners trading on the forex market should remember that not every trade will be profitable. A clear strategy and money management are the keys to success in long-term trading.