Analysis of Monday's Trades:
1H Chart of the GBP/USD Pair
The GBP/USD pair also attempted to continue its upward movement on Monday, and it performed better than the EUR/USD pair. The level of 1.3643 serves as a strong support for the British currency, and its prospects are approximately as promising as those of the euro. It became known yesterday that Donald Trump may impose new tariffs, this time against Canada. The US president's anger was triggered by a glaring issue: Canada is trading with China and even signing trade agreements with Beijing! Trump could not accept such injustice, accused the country of wanting to become a "commodity hub," and warned of a potential takeover by China. The tariffs have not yet been imposed, but it seems Trump is waiting for a response from Ottawa to his accusations. If the solution proposed by Mark Carney and his colleagues does not satisfy Trump, we may see new 100% tariffs for Canada. This could be another blow to the US dollar, and the results of the Fed meeting, known tomorrow evening, are also under constant scrutiny from the White House.
5M Chart of the GBP/USD Pair
On the 5-minute timeframe, the pair bounced three times from the area of 1.3643-1.3652 on Monday, and each of these bounces could have been seen as a buy signal by novice traders. The pair took some time to start rising, but ultimately, the British pound moved up approximately 50 pips.
How to Trade on Tuesday:
On the hourly timeframe, the GBP/USD pair has turned north, and we can expect the British pound to rise in the coming weeks. There are no global grounds for the US dollar's mid-term growth, so in 2026, we anticipate the resumption of the global upward trend from 2025, which may push the pair to the 1.4000 mark soon. Trump's policies continue to suggest no strengthening for the American currency.
On Tuesday, novice traders can consider short positions if the pair settles below the 1.3643-1.3652 area, targeting 1.3574-1.3590. A bounce from the area of 1.3643-1.3652 would allow for new long positions targeting 1.3763.
On the 5-minute timeframe, you can currently trade at the levels of 1.3259-1.3267, 1.3319-1.3331, 1.3365, 1.3403-1.3407, 1.3437-1.3446, 1.3484-1.3489, 1.3529-1.3543, 1.3574-1.3590, 1.3643-1.3652, 1.3763, and 1.3814-1.3832. On Tuesday, no significant events are scheduled in the UK, while the US will release the ADP report on private-sector employment changes (weekly). We do not consider this report essential, so all attention is focused on Donald Trump today.
Main rules of the trading system:
- Signal strength is judged by the time required to form the signal (rebound or breakout). The less time required, the stronger the signal.
- If two or more trades were opened on false signals near a level, then all subsequent signals from that level should be ignored.
- 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.
- 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.
- 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.
- If two levels are located too close to each other (5–20 pips), they should be considered a support or resistance area.
- 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.
