Analysis of Monday's Trades

1H Chart of GBP/USD

On Monday, the GBP/USD pair continued its upward movement. Yet another break of the ascending trendline did not benefit the U.S. dollar, which continues to decline steadily and depreciate over the medium term. In the hourly timeframe, there is now a new ascending trendline, the price of which has already bounced off three times. A fourth rebound is possible today and may trigger a new upward swing in the British pound.

A consolidation below the trendline won't carry much weight for the dollar because no matter what technical pattern forms, if the market refuses to buy the dollar, it won't strengthen. The market mainly takes profits from short dollar positions, occasionally leading to minor rebounds in the U.S. currency. But the dollar cannot count on much more right now. Even a fresh wave of hostilities in the Middle East failed to help the greenback—even though it used to rise consistently on geopolitical tension.

5M Chart of GBP/USD

On the 5-minute chart, two solid trading signals were formed on Monday. First, the pair bounced precisely from the 1.3535 level and later managed to break through the 1.3580–1.3592 area, albeit with some difficulty. By the evening, a downward movement began, which may end today, but novice traders had ample time and opportunity to close long positions in profit.

Trading Strategy for Tuesday:

On the hourly timeframe, the GBP/USD pair remains focused on Donald Trump and continues to respond skeptically to his policies. As before, the market uses every opportunity to sell the dollar rather than buy it. This will continue until the market sees real signs of the trade war ending and Trump stops making decisions beyond his authority. Even the escalation of the military conflict between Israel and Iran supported the dollar for only a few hours.

On Tuesday, GBP/USD may continue its upward movement since the dollar doesn't always need a specific reason to fall. Aside from technical corrections, we don't see any factors that could meaningfully support the U.S. currency.

On the 5-minute timeframe, the relevant levels for trading are 1.3043, 1.3102–1.3107, 1.3203–1.3211, 1.3259, 1.3329–1.3331, 1.3421–1.3443, 1.3518–1.3535, 1.3580–1.3592, 1.3643–1.3652, 1.3695, 1.3740. No significant events are scheduled in the UK for Tuesday, while the U.S. will release industrial production and retail sales reports. However, we believe the market will continue to focus primarily on developments in the Middle East and statements from Trump personally.

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.