Analysis of Monday's Trades

1H Chart of GBP/USD

On Monday, the GBP/USD pair also attempted to correct but failed to even consolidate above the first resistance level on its way up—1.2613, as clearly shown in the chart above. In the second half of the day, the price gravitated toward closing the gap, as mentioned in previous articles. At the moment, the technical outlook for the pound suggests the beginning of a flat movement between the levels of 1.2502 and 1.2613. Since no significant news events are scheduled today in the UK or the US, the price may remain within this range. We still see no basis for a strong rise in the British currency. A correction is possible but requires at least some news support, which is still lacking. Therefore, we believe a new decline is still more likely than growth. On Monday, no important events or reports in the US or the UK left traders with nothing to react to.

5M Chart of GBP/USD

Three excellent trading signals were formed in the 5-minute time frame on Monday, and another one occurred overnight on Tuesday. The price bounced twice from the 1.2547 level, allowing beginners to open long positions each time. It also bounced once from the 1.2613 level, offering an opportunity to open short positions. Overnight, there was a bounce from the 1.2502–1.2508 area, which was a basis for opening new long positions. However, since this last signal occurred overnight, it was likely not tradable.

Trading Strategy for Tuesday:

The GBP/USD pair sustains a downward trend in the hourly time frame. We fully support the pound's decline in the medium term, as we believe this is the most logical outcome. The pound has not shown any willingness to correct, despite having reasons to do so last week. The decline may continue because the market currently requires no justification for selling the pair.

On Tuesday, novice traders can expect calm and steady movements between 1.2502 and 1.2613.

In the 5-minute time frame, trading can focus on the levels of 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. On Tuesday, no significant events are expected in the UK or the US, so strong movements are again unlikely. We believe the flat market trend may continue today.

Core Trading System Rules:

1. Signal Strength: The strength of a signal is measured by the time it takes to form (a rebound or level breakthrough). The shorter the time, the stronger the signal.
2. False Signals: If two or more trades near a level result in false signals, all subsequent signals from that level should be ignored.
3. Flat Markets: Pairs may generate numerous false signals or none during a flat market. 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. Close all trades manually afterward.
5. MACD Signals: Trade MACD signals on the hourly timeframe only when there is good volatility and a trend confirmed by trendlines or channels.
6. Close Levels: If two levels are close (5–20 pips apart), treat them as a support or resistance area.
7. Stop Loss: Place a Stop Loss at breakeven after the price moves 20 pips in the intended direction.

Key Chart Elements:

Support and Resistance Levels: Target levels for opening or closing positions. Take Profit orders can also be set here.

Red Lines: Channels or trendlines that show the current trend and the preferred trading direction.

MACD Indicator (14,22,3): A histogram and signal line that serve as supplementary trading signals.

Important Events and Reports: Found in the economic calendar, these can strongly influence price movements. During their release, trade cautiously or exit the market to avoid sharp reversals against the preceding trend.

Forex beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are critical for long-term success in trading.