Analysis of Monday's Trades
1H Chart of GBP/USD
On Monday, the GBP/USD pair reached 1.3580 — heights the British pound hadn't seen in over three years. As we've said, the pound can only thank Donald Trump for this rally. Both the euro and the pound had been falling against the dollar for 16 years, and they began to surge only with Trump's arrival. Clearly, it's not the euro or the pound rising, but the U.S. dollar collapsing. Thus, the pound itself deserves no credit for the current bullish movement. However, Trump may continue pushing the dollar into the abyss for several months. The situation with trade tariffs remains unclear, and Trump's stance toward trade partners changes weekly. One day, it's "talks are progressing, and a great deal is coming," and the next, it's "talks failed, and I'm raising tariffs." The market is tired of adjusting to Trump's ever-shifting position, so it now simply sells the dollar and ignores any positive news — because Trump will likely contradict it the next day.
5M Chart of GBP/USD
On Monday, the trading pair generated only one signal in the 5-minute time frame. At the beginning of the European session, the price rebounded from the 1.1413–1.1424 area, after which it spent most of the day moving downward. The short trade could have been closed anytime, with an average profit of about 25 pips. Volatility throughout the day was not high.
Trading Strategy for Tuesday:
On the hourly timeframe, the GBP/USD pair continues to move in response to Donald Trump and remains highly skeptical of his policies. While there are some signs of easing trade tensions, the market no longer reacts to them — just like it no longer reacts to the monetary policy of the Fed or Bank of England or even the macroeconomic backdrop. The market has not only grown extremely negative toward Trump's policies, but now it expects and believes in negative outcomes by default.
On Tuesday, the GBP/USD pair may continue its upward movement. One day of rest is enough. There's little doubt the market will again seek any excuse to sell the dollar or will simply wait for new headlines. The situation in the market is not changing daily.
On the 5-minute chart, the following levels can be used for trading: 1.2913, 1.2980–1.2993, 1.3043, 1.3102–1.3107, 1.3203–1.3211, 1.3259, 1.3329–1.3331, 1.3421–1.3443, 1.3537, 1.3580–1.3592, 1.3652–1.3660, 1.3695. No significant events are scheduled in the UK for Tuesday, but don't forget — Donald Trump could make another high-impact announcement at any moment, just as he did on Friday and Monday. The U.S. durable goods orders report is essentially the only scheduled event.
Core Trading System Rules:
- Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
- False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
- 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.
- Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
- 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.
- Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
- 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.
