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21.11.202407:44 Forex Analysis & Reviews: How to Trade the GBP/USD Pair on November 21? Simple Tips and Trade Analysis for Beginners

Analysis of Wednesday's Trades

1H Chart of GBP/USD

Exchange Rates 21.11.2024 analysis

The GBP/USD pair continued to trade within a horizontal channel on Wednesday, as seen in the chart above. The British pound had an excellent opportunity to correct upward and show decent growth but failed to capitalize on it. The UK inflation report exceeded expectations, indicating that the Bank of England will now almost certainly refrain from hastily easing its monetary policy—especially given its projections for rising inflation at the end of 2024 and the beginning of 2025. However, how can the pound rise when the market refuses to buy it?

This situation does not surprise us, as the pound sterling rose for nearly two years, often without apparent justification. For two years, the market priced in just one factor: the anticipated easing of monetary policy by the Federal Reserve. Now that the Fed has initiated this cycle, the market has no factors to justify selling the U.S. dollar

5M Chart of GBP/USD

Exchange Rates 21.11.2024 analysis

On Wednesday, two less-than-ideal signals formed on the 5-minute timeframe. The price broke above the 1.2680–1.2685 range following the release of the inflation report, and traders could reasonably expect the pound to rise. However, the market took a different approach and resumed selling the pound. As a result, the decline began, but the price failed to reach the target levels, and the drop wasn't particularly strong.

Trading Strategy for Thursday:

The GBP/USD pair continues to lean downward on the hourly timeframe. In the medium term, we fully support a decline in the pound, as we believe this is the only logical scenario. The pound may attempt another correction soon, but for it to materialize, the currency needs substantial support. Last Thursday, it received no support from Jerome Powell, nor did it get any boost from macroeconomic data on Friday.

On Thursday, novice traders may expect a resumption of the downward movement, but it is important to note that the pair is currently in a flat market.

On the 5-minute TF, it is now possible to trade at 1.2502-1.2508, 1.2547, 1.2633, 1.2680-1.2685, 1.2754, 1.2791-1.2798, 1.2848-1.2860, 1.2913, 1.2980-1.2993. On Thursday, no significant events are scheduled in the UK or the U.S., so expecting the flat market to end or significant volatility is likely unrealistic.

Core Trading System Rules:

  1. Signal Strength: The strength of a signal is measured by the time it takes to form (a rebound or level breakthrough). The shorter the time, the stronger the signal.
  2. False Signals: If two or more trades near a level result in false signals, all subsequent signals from that level should be ignored.
  3. Flat Markets: Pairs may generate numerous false signals or none during a flat market. Stop trading at the first signs of a flat market.
  4. Trading Hours: Open trades between the start of the European session and the middle of the US session. Close all trades manually afterward.
  5. MACD Signals: Trade MACD signals on the hourly timeframe only when there is good volatility and a trend confirmed by trendlines or channels.
  6. Close Levels: If two levels are close (5–20 pips apart), treat them as a support or resistance area.
  7. Stop Loss: Place a Stop Loss at breakeven after the price moves 20 pips in the intended direction.

Key Chart Elements:

Support and Resistance Levels: Target levels for opening or closing positions. Take Profit orders can also be set here.

Red Lines: Channels or trendlines that show the current trend and the preferred trading direction.

MACD Indicator (14,22,3): A histogram and signal line that serve as supplementary trading signals.

Important Events and Reports: Found in the economic calendar, these can strongly influence price movements. During their release, trade cautiously or exit the market to avoid sharp reversals against the preceding trend.

Forex beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are critical for long-term success in trading.

*تعینات کیا مراد ہے مارکیٹ کے تجزیات یہاں ارسال کیے جاتے ہیں جس کا مقصد آپ کی بیداری بڑھانا ہے، لیکن تجارت کرنے کے لئے ہدایات دینا نہیں.

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