Analysis of Friday's Trades

1H Chart of GBP/USD

The GBP/USD pair also traded rather calmly on Friday. However, unlike the EUR/USD pair, traders didn't find it necessary to react to the UK's macroeconomic data. Still, they don't need macroeconomic support at this point. Just last week, the pound rose by 300 pips, while there are abundant reasons for the dollar to continue falling.

Let's recall: last week, Donald Trump caused chaos that looked like something out of a video game or comedy movie, trying to resolve the Iran-Israel conflict. Then, news broke of a ceasefire between Jerusalem and Tehran. Later, Trump resumed his criticism of the Federal Reserve and began looking for a replacement for Powell. At the same time, the Bank of England started to warn of high inflation and the possibility that it could be persistent and long-lasting. This means the BoE will not be cutting rates in the near future.

Which of the above-mentioned factors could even theoretically support the U.S. dollar?

5M Chart of GBP/USD

In the 5-minute timeframe, no trading signals were formed on Friday. The price only approached the 1.3695 level at the end of the day and trading week, but opening new positions two hours before the market closed and ahead of the weekend was hardly a good idea. The pound remains very close to its three-year highs, and we can expect to see new growth in GBP/USD this week.

Trading Strategy for Monday:

On the hourly timeframe, GBP/USD continues to be heavily influenced by Trump and remains quite skeptical of his policies. The market is still either actively selling the dollar or waiting for fresh negative developments from across the ocean to justify doing so. This situation will persist until the market sees real signs of the trade war ending or Trump stops making decisions that exceed his authority and shock market participants.

On Monday, the GBP/USD may attempt to extend its upward move as the market enters a new phase of the uptrend. As before, there are numerous fundamental reasons for the market to distance itself from the U.S. dollar.

On the 5-minute chart, you can now trade using the following levels: 1.3203–1.3211, 1.3259, 1.3329–1.3331, 1.3413–1.3421, 1.3518–1.3535, 1.3580–1.3592, 1.3643–1.3652, 1.3695, 1.3763, 1.3814–1.3832.

On Monday, the final Q1 GDP reading will be released in the UK. Even if the result comes in weaker than the current forecast of +0.7%, it is unlikely to trigger a sharp decline in the British currency. In the U.S., the economic calendar is devoid mainly of events.

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.