October 29, 2021

How to trade GBP/USD on October 29? Simple tips for beginners. The pound was delighted with the failed US GDP report

 The GBP/USD pair moves between the levels of 1.3740 and 1.3833 on the 30-minute timeframe for the eighth trading day. That is, less than a 100-point horizontal channel. Quotes left this channel for a long time, but they spend most of their time in it. And today, despite a rather strong upward movement (although weaker than for the euro/dollar pair), the quotes remained within this range. Thus, if we cannot talk about a trend in the euro currency now, then even more so for the pound. Therefore, signals from the MACD indicator should still not be considered as there is still no trend. It should also be noted that today's growth in the pound was driven solely by the US GDP report, which completely failed. Recall that the US economy grew by only 2.0% in the third quarter, although the previous quarter recorded growth of 6.7%.

The technical picture was twofold on the 5-minute timeframe today. Several trading signals were generated, which did not raise any questions, but there was also one rather difficult one for novice traders. Let's figure it out. The first buy signal was formed at the very beginning of the European trading session, when the price bounced rather imprecisely from the level of 1.3740. The upward movement after it was 23 points. Therefore, newcomers should have had time to place a Stop Loss order at breakeven. And on this order, the short position was closed, as the price returned to the level of 1.3740 and bounced off it again. Therefore, the second buy signal should also be processed with a long position. This time the price could not go up more than 20 points and once again returned to the level of 1.3740. This happened neatly by the beginning of the US session, when the publication of the GDP report was scheduled in the United States. Thus, there were two options for possible action. Or stay in a long position by setting Stop Loss, but not at breakeven, but slightly lower, since SL is set to breakeven only after passing 20 points in the right direction. Or, you can close the deal before the GDP is published, and then open a new one, as the price bounced off the 1.3740 level again, and the GDP report itself did not speak in favor of the dollar. That in the first, that in the second case, the deal eventually turned out to be profitable and made it possible to earn almost 50 points, since the price subsequently rose to the level of 1.3814 and bounced off it. The last trading signal to sell could no longer be worked out, although it turned out to be profitable and allowed us to earn about 10 more points.

How to trade on Friday:

At this time, there is still no trend on the 30-minute timeframe, and the volatility remains low. Since there is no trend, we do not advise beginners to follow the signals on the MACD indicator for some time. For these signals to be relevant, a trend movement is required. The important levels on the 5-minute timeframe are 1.3708, 1.3740, 1.3814, 1.3830 - 1.3833, 1.3852. We recommend trading on them on Friday. The price can bounce off them or overcome them. As before, we set Take Profit at a distance of 40-50 points. At the 5M TF, you can use all the nearest levels as targets, but then you need to take profit, taking into account the strength of the movement. When passing 20 points in the right direction, we recommend setting Stop Loss to breakeven. Novice traders may not look into the calendar of macroeconomic events on October 29, because it is empty. Thus, volatility may become lower and movements not as good as on Thursday.