Analysis of Monday's Trades

1H Chart of GBP/USD

On Monday, the GBP/USD pair rose by 130 pips. Such was the "boring Monday" without a macroeconomic report or important speech. The pound sterling gained more than one cent out of nowhere — a reflection of the pound's behavior over recent months. The pound is not rising for any specific reason. It is increasing simply because the dollar keeps falling. And the U.S. dollar is falling for only one reason — Donald Trump. One could debate endlessly whether one person can dominate the markets for an extended period. But, as practice shows, he can.

Traders continue to ignore almost all macroeconomic reports. The dollar still refuses to rise, even when there are fundamental and macroeconomic grounds for it. The British currency may post another round of growth even in the complete absence of news. Overall, the pound sterling has been rising more strongly than the euro.

5M Chart of GBP/USD

Fairly good trading signals were also formed on Monday in the 5-minute timeframe. In the morning, the price very precisely bounced off the 1.3289–1.3297 area, and later, during the U.S. trading session, it broke through the 1.3365 level and reached 1.3421 by evening. Thus, novice traders could have opened long positions in the morning and closed them in the evening, realizing a profit of about 90 pips.

Trading Strategy for Tuesday:

On the hourly timeframe, the GBP/USD pair could have long since started a downward trend, but the market continues to focus solely on Trump. As a result, sterling continues to climb steadily. Therefore, the pair's future movements still depend entirely on the American president and his decisions—and nothing else. Perhaps the market's attitude toward news will change in the future, but for now, there are no signs of that happening.

On Tuesday, the GBP/USD pair may pull back downward. However, seeing yet another unexplained rise in the pound would not be surprising either.

On the 5-minute timeframe, trading can currently be based on the following levels: 1.2848–1.2860, 1.2913, 1.2980–1.2993, 1.3043, 1.3102–1.3107, 1.3145–1.3167, 1.3203, 1.3289–1.3297, 1.3365, 1.3421–1.3440, 1.3488, 1.3537, 1.3580–1.3598. No significant events are scheduled in the UK for Tuesday. The first report from the "all about the U.S. labor market" series will be released in the U.S., although it is unlikely to have a major impact. Yesterday, the pair rose by 130 pips without any particular reason. If the JOLTS report is strong today, let's see how much the dollar will strengthen.

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.