Friday's Trade Review:

1H Chart of the GBP/USD Pair

The GBP/USD pair was nearly stagnant on Friday, and even the UK retail sales report did not prompt the market to move more actively. However, this is not surprising, as earlier in the week, traders paid almost no attention to much more significant reports on inflation and unemployment from Britain. Both of these reports could have triggered a decline in the British pound, but for most of the week, it had been recovering after the previous week's fall, during which the market could have reacted to the sharp slowdown in inflation and the diminished chances of the Bank of England tightening monetary policy. Thus, we witnessed a corrective week, with the British currency rising on encouraging geopolitical news. This week, the market will also carefully analyze incoming geopolitical information. Over the weekend, Donald Trump announced an agreement with Tehran, but this information must now be confirmed, and the deal must not only be agreed upon but also signed by the conflict participants.

5M Chart of the GBP/USD Pair

On the 5-minute timeframe, one sell signal was generated on Friday—the price rebounded from 1.3456, but a significant decline by the end of the day did not materialize. On Monday night, the pair consolidated above the 1.3456-1.3476 area, so the new week began with a buy signal formation. However, further growth of the pound will depend on geopolitical events and news.

How to Trade on Monday:

On the hourly timeframe, the GBP/USD pair remains in a downward trend, but the geopolitical backdrop changed last week, so the British currency is now rising quite confidently. Without a resumption of full-scale war in the Middle East, the dollar cannot expect growth as it did in February-March. Individual events may still provoke their strengthening, but we do not believe the market will initiate a new wave of risk aversion.

On Monday, novice traders may open short positions with a target of 1.3380-1.3386 if the price consolidates back below the 1.3456-1.3476 area. A consolidation above the 1.3456-1.3476 area allows for opening long positions with a target of 1.3587-1.3598.

On the 5-minute timeframe, trading can now be conducted at levels of 1.3175-1.3180, 1.3259-1.3267, 1.3319-1.3331, 1.3380-1.3386, 1.3456-1.3476, 1.3587-1.3598, 1.3631-1.3641, 1.3695, and 1.3741-1.3751. The event calendars for the UK and the U.S. are completely empty today, so the market will focus on geopolitics and technical analysis.

Main Rules of the Trading System:

1. The strength of the signal is determined by the time it took to form the signal (bounce or breakout of the level). The less time it took, the stronger the signal.
2. If two or more trades were opened near any level based on false signals, all subsequent signals from this level should be ignored.
3. In a flat market, any pair can generate many false signals or none at all. Technical levels may be ignored.
4. On the hourly timeframe, it is preferable to trade signals from the MACD indicator only in the presence of good volatility and a trend that is confirmed by a trend line or trend channel.
5. If two levels are too close together (5-20 pips apart), treat them as a support or resistance zone.
6. After a move of 15 pips in the right direction, a Stop Loss should be set to breakeven.

What is on the Charts:

Price levels (areas) of support and resistance – levels that are targets when opening purchases or sales, or sources of signals.

Red lines – channels or trend lines that display the current trend and indicate which direction is preferable to trade now.

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

Important speeches and reports (contained in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be done as cautiously as possible, or one should exit the market to avoid a sharp price reversal against the preceding movement.

Beginners trading in the Forex market should remember that not every trade can be profitable. Developing a clear strategy and effective money management are key to long-term trading success.