Analysis of Thursday's Trades

1H Chart of GBP/USD

The GBP/USD pair also showed a downward move on Thursday, but the pound rose steadily on Wednesday evening—unlike the EUR/USD. Time and again, we see the British pound showing impressive resilience against the dollar. This can be explained by the Bank of England's stance, which just concluded its second policy meeting of the year.

Let's recall that the BoE initially took a more hawkish position than the European Central Bank but a less hawkish one than the Federal Reserve. This is logical: the euro tends to fall more sharply (when it falls at all), while the pound is holding up better. Of course, we must factor in Donald Trump, whose actions have recently sent the dollar tumbling. However, this factor is beyond our control, and we cannot predict Trump's next move or how the market will respond. From our point of view, the dollar has dropped too sharply.

5M Chart of GBP/USD

On the 5-minute chart, a sell signal appeared on Thursday. Early in the European session, the price consolidated below the 1.2980–1.2993 zone but failed to sustain a clear downward move and got stuck between 1.2913 and 1.2980. Still, novice traders could have profited from the short position, as no buy signals formed, and the trade could be closed anywhere within the range.

Trading Strategy for Friday:

On the hourly chart, GBP/USD should have already started a downtrend, but Trump keeps preventing it. We still expect the pound to fall toward 1.1800 in the medium term, but we don't know how long the Trump-induced dollar weakness will continue. Once this movement ends, the technical picture across all timeframes may change drastically. For now, long-term trends still point south. The pound's rally isn't baseless but is too strong and irrational.

On Friday, GBP/USD may continue to rise as the market no longer needs any justification to sell the dollar. However, we are now openly expecting a downward correction.

For intraday trading on the 5-minute chart, you can use the following levels: 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 major events are scheduled in the UK or the U.S. on Friday, so it could feel like a semi-holiday session. The pound has barely broken below the ascending channel, so a technical basis exists for a decline.

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.