Analysis of Tuesday's Trades

1H Chart of GBP/USD

On Tuesday, the GBP/USD pair experienced significant growth that seemed to come out of nowhere. It's important to note that the market is currently ignoring both macroeconomic and fundamental factors. Otherwise, the pound would be declining rather than rising. The primary reason for the dollar's weakness appears to be Donald Trump. It remains uncertain how long he will continue to impose tariffs and sanctions on countries he disapproves of. Similarly, we don't know how long the market will react solely based on "the Trump factor."

On one hand, the current trend appears simple and straightforward; on the other, it raises numerous questions. The market is behaving as if the U.S. economy has already entered a recession, even though no significant negative changes in key U.S. macroeconomic indicators have been observed.

5M Chart of GBP/USD

On the five-minute timeframe, there was a clear buy signal near the 1.2913 level on Tuesday, followed by another buy signal near 1.2860 overnight. The overnight signal was more challenging to execute, while the daytime signal was much easier. The pound continues to rise despite external factors.

Trading Strategy for Wednesday:

On the hourly timeframe, the GBP/USD pair should have started a short-term downward trend long ago, but Trump is doing everything to prevent that. We still expect the pound to decline toward the 1.1800 target in the medium term. However, no one knows how long the dollar's "Trump-driven" collapse will last. The technical picture across all timeframes may change dramatically when this movement ends.

On Wednesday, GBP/USD could continue rising, especially if Donald Trump keeps shaking up global markets with his policies. The U.S. inflation report is important but not as crucial as news coming from the American president.

For the five-minute timeframe, the key trading levels are 1.2301, 1.2372-1.2387, 1.2445, 1.2502-1.2508, 1.2547, 1.2613, 1.2680-1.2685, 1.2723, 1.2791-1.2798, 1.2848-1.2860, 1.2913, 1.2980-1.2993, 1.3043, 1.3102-1.3107. No significant events are scheduled for Wednesday in the UK, while the U.S. inflation report could have triggered a strong market reaction—if the market weren't ignoring all macroeconomic news. Even if U.S. inflation rises, what will it mean for the dollar? A 50-pip gain after a 500-pip loss in a week?

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 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.