Analysis of Thursday's Trades

1H Chart of GBP/USD

On Thursday, the GBP/USD pair experienced a slight decline but remained within a very narrow range, resembling a sideways channel. The British pound has been fluctuating between the 1.2913 and 1.2980 levels for several days. Despite a significant rally, a correction has yet to start, indicating that the market is not currently focused on purchasing dollars or taking profits on long positions. Most of the macroeconomic and fundamental factors are being overlooked, making movements difficult to predict. It is uncertain when Trump will announce new tariffs, which could potentially trigger another decline in the dollar. Additionally, it remains unknown when the market will shift its focus from this singular factor and start considering other influences. The uptrend remains intact, as the trendline is still valid.

5M Chart of GBP/USD

On the 5-minute timeframe, no trading signals were generated on Thursday. Throughout the day, the price did not approach the boundaries of the sideways channel, indicating there was no justification for entering the market.

Trading Strategy for Friday:

On the hourly timeframe, the GBP/USD pair should have started a downtrend long ago, but Trump continues to prevent this from happening. We still expect a pound decline toward 1.1800 in the medium term, but it is unclear how long the Trump-induced dollar decline will persist. Once this movement ends, the technical picture across all timeframes could change drastically. For now, however, long-term trends still point downward. While the British pound's rise is not without reason, it has been excessive and irrational.

On Friday, GBP/USD may continue rising if Trump continues to stir up chaos and dictate global conditions. A downward correction is overdue, but the market focuses only on selling the dollar. The inertia-driven move north may well continue.

On the 5-minute timeframe, consider trading at 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. On Friday, the UK will release January's GDP and industrial production reports. These are relatively important but not critical reports and are unlikely to cause a significant decline in the pound. In the U.S., the University of Michigan Consumer Sentiment Index will be published.

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.