Analysis of Friday's Trades

1H Chart of GBP/USD

On Friday, the GBP/USD pair also attempted to move further upward. It is worth noting that, unlike the euro, the British pound is not stagnating or trading in a flat range. Instead, it forms a clear upward correction, although this movement cannot last indefinitely. Last week, the pound rose purely on speculative enthusiasm, as most of the key U.S. data were favorable for the dollar. Nevertheless, the pound continued to rise, indicating a technically driven correction. Like all corrections, this correction will eventually end, giving way to a resumption of the trend-driven movement. Therefore, we continue to expect the pair to decline. The sharp rebound from the 1.2798 level on Friday could signal the end of the correction. The NonFarm Payrolls report exceeded forecasts, the wage report was stronger, and the University of Michigan Consumer Sentiment Index was better than expected. Only the unemployment rate fell short of expectations in October—three positives against one negative favor the dollar. We anticipate the dollar will strengthen further on Monday.

5M Chart of GBP/USD

The 5-minute timeframe on Friday generated several trading signals. Entry opportunities for buying appeared during the European session near the 1.2754 level, where two signals formed. Following the release of U.S. data, there was a somewhat imprecise rebound from the 1.2791–1.2798 area, which was not acted upon. Later in the day, two more sell signals were formed near 1.2754, but as they emerged late in the evening, they could also have been skipped. Short positions can be held until Monday if anyone decides to trade them.

Trading Strategy for Monday:

On the hourly timeframe, GBP/USD continues to correct after a two-month decline. In the medium term, we fully support the view of further declines in the pound, as this appears to be the most logical scenario. The correction seems purely technical, but now it looks complete.

On Monday, novice traders may anticipate further declines in the British pound, as three sell signals were generated on Friday, and the macroeconomic backdrop supports the dollar.

On the 5-minute TF, you can now trade at 1.2387, 1.2445, 1.2502-1.2508, 1.2547, 1.2633, 1.2680-1.2685, 1.2754, 1.2791-1.2798, 1.2848-1.2860, 1.2913, 1.2980-1.2993. Event calendars for the UK and the U.S. are empty on Monday. However, the U.S. dollar may strengthen today, driven by Friday's reports and the current technical picture.

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 15 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.