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16.01.202606:59 Forex Analysis & Reviews: How to trade the GBP/USD currency pair on January 16? Simple tips and trade review for beginners

Relevance up to 23:00 2026-01-16 UTC--5
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Trade review of Thursday:

1H chart of the GBP/USD pair

Exchange Rates 16.01.2026 analysis

The GBP/USD pair also showed a downward move on Thursday, for which there were even fewer grounds. In the UK, early in the morning, reports on industrial production and November GDP were published. The British economy, contrary to rather low forecasts, grew by 0.3% m/m, and industrial production by 1.1% (also contrary to negative forecasts). Thus, from the very morning, the pound should have appreciated. But we saw no rise in the pair; instead, we saw a decline in positive third-tier US reports that began BEFORE they were published. Thus, we continue to believe that movements in the euro pair are purely technical, and movements in the pound depend solely on the euro. Market volatility remains low, confirming the lack of a strong desire to trade in either direction. A trendline has been formed for a completely illogical (from a macroeconomic and fundamental point of view) downward impulse.

5M chart of the GBP/USD pair

Exchange Rates 16.01.2026 analysis

On the 5-minute TF on Thursday, one decent sell signal was formed in the form of a rebound from the 1.3437–1.3446 area. Thus, during the European session, novice traders could open short positions. By the end of the day, the pair fell 40–50 pips, which could easily be collected into January's gains.

How to trade on Friday:

On the hourly TF, the GBP/USD pair began forming a new downtrend, supported by only one factor: the euro's decline. There are no global grounds for medium-term dollar strength, so we expect movement only to the north. Overall, we expect the resumption of the 2025 global uptrend, which could take the pair to 1.4000 within the next couple of months.

On Friday, novice traders can remain in short positions targeting the 1.3319–1.3331 area, but volatility is weak now, so the price may not reach that area. A rebound from the 1.3319–1.3331 area will allow opening longs targeting 1.3437–1.3446. A close below the 1.3319–1.3331 area — new shorts targeting 1.3259–1.3267.

On the 5-minute TF, you can trade the levels 1.3043, 1.3096–1.3107, 1.3203–1.3212, 1.3259–1.3267, 1.3319–1.3331, 1.3437–1.3446, 1.3529–1.3543, 1.3574–1.3590, 1.3643–1.3652, 1.3682, 1.3763. No interesting reports are scheduled in the UK for Friday, and the US will release the industrial production report for December. That report is unlikely to provoke a strong market reaction.

Main rules of the trading system:

  1. Signal strength is judged by the time required to form the signal (rebound or breakout). The less time required, the stronger the signal.
  2. If two or more trades were opened on false signals near a level, then all subsequent signals from that level should be ignored.
  3. In a flat, any pair can generate many false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
  4. Trades are opened between the start of the European session and the middle of the American session; after that, all trades must be closed manually.
  5. On the hourly timeframe, MACD-based signals should be traded only when there is good volatility and a trend confirmed by a trendline or trend channel.
  6. If two levels are located too close to each other (5–20 pips), they should be considered a support or resistance area.
  7. After the price moves 20 pips in the correct direction, set the stop loss to breakeven.

What is shown on the charts:

Support and resistance price levels — levels that serve as targets when opening buys or sells. Take Profit can be placed near them.

Red lines — channels or trendlines that reflect the current tendency and show which direction is preferable to trade now.

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

Important speeches and reports (always listed in the news calendar) can strongly affect a currency pair's movement. Therefore, during their release, trading should be done with maximum caution, or positions should be closed, to avoid a sharp price reversal against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.

Paolo Greco
Analytical expert of InstaForex
© 2007-2026

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