Analysis of Monday's Trades

1H Chart of GBP/USD

On Monday, the GBP/USD pair also attempted to resume its upward movement and even broke through the latest local high within the current uptrend on the hourly timeframe. The fact that there were no fundamental reasons for a new increase in the pound is no longer surprising. The U.S. retail sales report was not very strong, but the U.S. dollar had already fallen before its release. In general, the dollar has been declining almost every day. After a sharp drop a couple of weeks ago, the U.S. currency has been unable to correct upwards. The movement in the pound is now purely momentum-driven, and the macroeconomic and fundamental background has virtually no significance for market participants. The ascending trendline continues to signal an uptrend, but in the long term, the downtrend persists.

5M Chart of GBP/USD

No clear trading signals were formed on Monday in the 5-minute timeframe. Unfortunately, before starting its next rally, the pound did not generate a buy signal. By the evening, the price reached the 1.2980-1.2991 area, where no rebound or breakout had yet formed. If one of these signals forms today, positions can be opened accordingly.

Trading Strategy for Tuesday:

On the hourly timeframe, the GBP/USD pair should have started a downtrend long ago, but Trump is doing everything possible to prevent this from happening. In the medium term, we still expect a decline in the pound towards 1.1800, but it remains unclear how long the dollar will continue falling due to Trump. When this movement ends, the technical picture on all timeframes may change drastically, but long-term trends are still pointing south. The pound has risen not without reason but again too strongly and illogically.

On Tuesday, the GBP/USD pair may continue its growth since the market does not need any reasons or justification to sell the dollar. A downward correction is overdue, but the market is not inclined to buy the dollar.

On the 5-minute timeframe, trading can be based on the following levels: 1.2301, 1.2372-1.2387, 1.2445, 1.2502-1.2508, 1.2547, 1.2613, 1.2680-1.2685, 1.2723, 1.2791-1.2798, 1.2848-1.2860, 1.2913, 1.2980-1.2993, 1.3043, and 1.3102-1.3107. No significant events or reports are scheduled for Tuesday in the UK, while the U.S. will release several less important reports, the most interesting being industrial production data.

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 Events and Reports: Found in the economic calendar, these can heavily influence price movements. Exercise caution or exit the market during their release to avoid sharp reversals.

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