empty
31.01.2025 08:12 AM
How to Trade the GBP/USD Pair on January 31? Simple Tips and Trade Analysis for Beginners

Analysis of Thursday's Trades

1H Chart of GBP/USD

This image is no longer relevant

The GBP/USD pair continued to trade sideways on Thursday. There was significantly less news regarding the British currency compared to the euro, but the movements were almost identical. The British currency appears to be struggling at the moment. After three days of flat trading, it seems to be merely following the euro's lead.

The technical outlook is quite uncertain. The ongoing three-week upward correction may extend for another three weeks; however, both the British pound and the euro currently have few reasons for further growth. The market has already reacted to Donald Trump's return to power, and it is unrealistic to keep selling the dollar solely because Trump wishes to impose tariffs worldwide. Recent macroeconomic data has indicated a likelihood of further declines for the British currency rather than growth. Nevertheless, a correction on the daily time frame was necessary. The main question now is: how much longer will this correction last?

5M Chart of GBP/USD

This image is no longer relevant

In the 5-minute time frame, the price movements on Thursday were remarkably chaotic for the third consecutive day, so we didn't even bother marking all the trading signals. The price fluctuated wildly throughout the day, disregarding any established levels and basic trading logic. The most outrageous moment occurred during the night when the pound experienced a 45-pip drop in just five minutes. Overall, there seems to be very little rationale behind the current price movements.

Trading Strategy for Friday:

On the hourly timeframe, the GBP/USD pair continues to form a short-term upward trend, which is essentially a correction. In the medium term, we fully expect the pound to resume its decline toward 1.1800, as we believe this is the only logical scenario. The key now is to wait for the downtrend to resume, using the trendline to help determine when the correction has ended.

On Friday, the GBP/USD pair may attempt to continue a downward pullback, as the 1.2502–1.2508 zone has still not been breached. However, the movements remain highly unusual and erratic.

On the 5-minute timeframe, trading can be done using the following levels: 1.2010, 1.2052, 1.2089-1.2107, 1.2164-1.2170, 1.2241-1.2270, 1.2301, 1.2372-1.2387, 1.2445, 1.2502-1.2508, 1.2547, 1.2633, 1.2680-1.2685, 1.2723, and 1.2791-1.2798. For Friday, no significant events are scheduled in the UK, while in the US, the Core PCE Price Index will be released. This may trigger a localized market reaction, but it is unlikely to be strong.

Core Trading System Rules:

  1. Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
  2. False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
  3. Flat Markets: In flat conditions, pairs may generate many false signals or none at all. It's better to 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, then manually close all trades.
  5. MACD Signals: On the hourly timeframe, trade MACD signals only during periods of good volatility and a clear trend confirmed by trendlines or trend channels.
  6. Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
  7. Stop Loss: Set a Stop Loss to breakeven after the price moves 20 pips in the desired direction.

Key Chart Elements:

Support and Resistance Levels: These are target levels for opening or closing positions and can also serve as points for placing Take Profit orders.

Red Lines: Channels or trendlines indicating the current trend and the preferred direction for trading.

MACD Indicator (14,22,3): A histogram and signal line used as a supplementary source of trading signals.

Important speeches and reports, which are consistently featured in the news calendar, can significantly influence the movement of a currency pair. Therefore, during their release, it is advisable to trade with caution or consider exiting the market to avoid potential sharp price reversals against the prior trend.

Beginners in the Forex market should understand that not every transaction will be profitable. Developing a clear trading strategy and practicing effective money management are crucial for achieving long-term success in trading.

Paolo Greco,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Chancy Deposit
    Deposit your account with $3,000 and get $1000 more!
    In February we raffle $1000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST

Recommended Stories

GBP/USD: Trading Plan for the US Session on February 27th (Review of Morning Trades)

In my morning forecast, I highlighted the 1.2680 level as a key reference point for entering the market. Looking at the 5-minute chart, the upward movement occurred, but the price

Miroslaw Bawulski 15:11 2025-02-27 UTC+2

EUR/USD: Trading Plan for the U.S. Session on February 27th (Review of Morning Trades)

In my morning forecast, I highlighted the 1.0491 level as a key area for market entry decisions. A review of the 5-minute chart shows that although there was an upward

Miroslaw Bawulski 14:50 2025-02-27 UTC+2

How to Trade the GBP/USD Pair on February 27? Simple Tips and Trade Analysis for Beginners

Analysis of Wednesday's Trades 1H Chart of GBP/USD On Wednesday, GBP/USD attempted to continue its upward movement, but this trend is starting to look questionable. Previously, we noted that

Paolo Greco 06:32 2025-02-27 UTC+2

How to Trade the EUR/USD Pair on February 27? Simple Tips and Trade Analysis for Beginners

Analysis of Wednesday's Trades 1H Chart of EUR/USD The EUR/USD currency pair traded flat on Wednesday, breaking the ascending trend line. However, it is important to note that a trendline

Paolo Greco 06:32 2025-02-27 UTC+2

Trading Recommendations and Analysis for GBP/USD on February 27: The Euro Dreams, the Pound Delivers

On Wednesday, the GBP/USD currency pair made another attempt to extend its local upward trend. Unlike the euro, the British pound has demonstrated a genuine upward correction in recent weeks

Paolo Greco 02:43 2025-02-27 UTC+2

Trading Recommendations and Analysis for EUR/USD on February 27: The Euro Continues to Push Upward

The EUR/USD currency pair attempted to maintain its local uptrend on Wednesday, which represents a continuation of the upward movement within a flat pattern on the daily time frame. However

Paolo Greco 02:43 2025-02-27 UTC+2

GBP/USD: Trading Plan for the U.S. Session on February 26th (Review of Morning Trades). Pound Stalls Around 1.2648

In my morning forecast, I highlighted the 1.2648 level as a key area for market entry decisions. Let's analyze the 5-minute chart to see what happened. The rise and false

Miroslaw Bawulski 17:35 2025-02-26 UTC+2

EUR/USD: Trading Plan for the U.S. Session on February 26th (Review of Morning Trades). Euro Remains in the Channel

In my morning forecast, I focused on the 1.0487 level as a key point for market entry decisions. Let's examine the 5-minute chart to understand what happened. The price declined

Miroslaw Bawulski 17:27 2025-02-26 UTC+2

Trading Recommendations and Analysis for GBP/USD on February 26: The Pound Continues to Rely on the Euro

On Tuesday, the GBP/USD currency pair made another attempt to continue its local upward trend. In contrast to the euro, the British pound has demonstrated a genuine upward correction

Paolo Greco 02:06 2025-02-26 UTC+2

Trading Recommendations and Analysis for EUR/USD on February 26: The Euro Continues Preparing for a Decline

On Tuesday, the EUR/USD currency pair once again attempted to maintain its local upward trend, which is part of a broader sideways movement observed on the daily timeframe. However

Paolo Greco 02:06 2025-02-26 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.