Trade Analysis for Friday:

1H Chart of the GBP/USD Pair

The GBP/USD pair rose slightly on Friday, but overall, we do not see a warranted and adequate correction after another strong decline. Despite the drop continuing for almost two months, we cannot call it stable, robust, or foundational for the dollar trend. Initially, the dollar rose due to the war in the Middle East; now, it is presumably based on the tightening of the Federal Reserve's monetary policy in the future. However, it is impossible to predict how, when, or how the conflict between Iran and the US will end, so the market situation may change several more times before the Fed begins to raise the key rate—if it does at all. It is also worth noting that on Friday, the University of Michigan's consumer sentiment index was published, which was overall below forecasts but much higher than the previous month's value. However, the market did not react to this report at all.

5M Chart of the GBP/USD Pair

On the 5-minute timeframe, only one trading signal was generated on Friday. Just before the start of the European trading session, the price bounced off the 1.3175-1.3180 range, allowing traders to open long positions. By the end of the day, the pair managed to rise by 25-30 pips, which novice traders could easily pocket.

How to Trade on Monday:

On the hourly timeframe, the GBP/USD pair continues to form a downward trend. The conflict in the Middle East, if not completely over, is on pause; the Fed has only signaled a possible increase in the key rate by the end of the year, which may not happen, and the market did not seem particularly upset by Keir Starmer's resignation. Thus, we do not see sufficient reasons for the dollar's recent growth or for its continuation.

On Monday, novice traders may open short positions targeting 1.3096-1.3107 if the price settles below the 1.3175-1.3180 range. A price bounce from the 1.3175-1.3180 range will allow new long positions to be opened, targeting 1.3259-1.3267. Volatility has noticeably decreased in recent days, which should be taken into account.

On the 5-minute timeframe, trading can currently be done at levels 1.3043, 1.3096-1.3107, 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, and 1.3695. On Monday, there are no important events scheduled in the UK or the US, so traders will not have anything to react to today. We believe that volatility will be low today, but there will be plenty of important events throughout the week. The main thing is for the market not to ignore them as it has in recent months.

Basic Rules of the Trading System:

1. The strength of a signal is determined by the time required to form it (a bounce or a breakout). The less time taken, the stronger the signal.
2. If two or more trades were opened at a particular level based on false signals, subsequent signals from that level should be ignored.
3. In a flat market, any pair may form many false signals or none at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be executed only when volatility is good, and a trend is confirmed by a trend line or channel.
5. If two levels are too close together (5 to 20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the correct direction, a Stop Loss should be set at breakeven.

What's on the Charts:

Price levels (areas) of support and resistance are targets when opening long or short positions or sources of signals.

Red lines indicate channels or trend lines that display the current trend and indicate the preferred direction for trading.

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

Important speeches and reports (contained in the news calendar) can significantly impact the movement of the currency pair. Therefore, during their release, trading should be conducted with maximum caution, or one should exit the market to avoid sharp reversals against preceding movements.

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