Analytics and trading signals for beginners. How to trade GBP/USD on December 21? Plan for opening and closing deals on Monday

Hourly chart of the GBP/USD pair

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Of course, the GBP/USD pair also fell by 170 points last night, taking the gap into account. However, the technical picture for the pound is somewhat different than for the euro. The British currency broke the upward trend on Friday, settling below the trend line. Therefore, selling the pound was reasonable. And novice traders could open new short deals at the opening of trading on Monday night. First of all, the initial reaction to the news about a new strain of coronavirus has been announced. Second, a sell signal from MACD has appeared. Not the strongest, not the most convincing, but it appeared. Those novice traders who went short overnight have gained profit by around 50 points. The pound/dollar pair may continue to fall on Monday. However, we warn newcomers that in the current environment you can earn a lot, but you can also lose a lot. Markets start to panic again, and it would be very difficult to trade at this moment. It's good if you know for sure that now the US dollar will rise for a couple of weeks, as it did in March. But nobody knows this.

Another theme is now added to the fundamental background, which will add headaches to traders in the last days of 2020. Naturally, the source of this topic is the long-suffering Great Britain, which has been in limbo for four years due to Brexit, and for the last nine months also due to the very likely absence of a trade deal with the European Union when Brexit is officially over. That is, in ten days ... In recent days, the parties should have been trying hard to reach an agreement (London and Brussels have been trying hard to reach it for several months), but now it is not a fact that negotiations will continue at all if Britain leaves to a new quarantine. Moreover, it is unclear whether the new strain of coronavirus has got to European countries, so now half of the EU will have to be closed as well? In general, I would like 2020 to end as quickly as possible, but the problem is that 2021 may be no better than its predecessor. And it certainly would be for the UK. The British economy will definitely lose a few percent of GDP in the fourth quarter due to the repeated lockdown that took place in November-December. If the country goes into a new hard quarantine, then this would be an additional blow to the economy. The main thing is to keep the new strain from spreading throughout the planet.

Possible scenarios for December 21:

1) The upward trend is temporarily canceled since the price has settled below the rising trend line. Therefore, in order for novice traders to consider trading bullish again, they need to wait for the downward trend to end or a new upward trend to appear. Until then, it is not recommended to buy the pound.

2) Selling, from our point of view, is now advisable, since the price has settled below the trend line. So now you can stay in open short positions with targets at 1.3300 and 1.3250 until the MACD indicator turns up. However, this indicator can turn upward at any time, since it is already at its lowest positions. And so the pound may continue to collapse.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.

The MACD indicator consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

The material has been provided by InstaForex Company - www.instaforex.com